April 2016 Archives

District Court Denies Request to Have Invalidity Case Proceed Prior to Infringement Case

April 28, 2016

The parties in this patent infringement action could not agree on the order of proof at trial. Defendants sought to present their invalidity defense first, arguing that if the patent is invalid, they could not be liable for infringement. The plaintiffs opposed the request to re-order the proof at trial and contended that their infringement claim should be presented first.

The district court noted that it had broad discretion to "exercise reasonable control over the mode and order of examining witnesses and presenting evidence." Federal Evidence Rule 611(a); see also Matter of Yagman, 796 F.2d 1165, 1171 (9th Cir. 1996) ("[T]he conduct and order of the trial are matters vested in the discretion of the district judge."); Gen. Signal Corp. v. MCI Telecomm. Corp., 66 F.3d 1500, 1507 (9th Cir. 1995) (reviewing district court's trial management for abuse of discretion).

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District Court Declines to Grant Voluntary Dismissal of Action with Motion for Judgment on the Pleadings Pending Where Patent Was Found Invalid by Another Court

April 26, 2016

After a district court in the Eastern District of Virginia invalidated the patent-in-suit because it did "not pass the two part test laid out by the Supreme Court in Mayo and Alice." Peschke Map Techs. LLC v. Rouse Properties Inc., No. 1:15-cv-1365, --- F. Supp. 3d ----, 2016 WL 1031295, at *7 (E.D. Va. Mar. 8, 2016), the plaintiff moved to dismiss a patent infringement action pending in a different district while a motion for judgment on the pleadings was pending.

The defendant had moved for judgment on the pleadings in its favor, arguing it cannot infringe on an invalid patent and that plaintiff is collaterally estopped from continuing to pursue its infringement claim. As noted by the district court, it is well known that a patentee is estopped from pursuing infringement claims for a patent that has been invalidated by another federal court, even if that action involved a different defendant. See Blonder-Tongue Labs., Inc. v. Univ. of Illinois Found., 402 U.S. 313, 333 (1971).

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District Court Grants Indicative Ruling to Vacate Judgment Based on Settlement of the Parties

April 20, 2016

In this patent infringement action, the parties reported that they had settled their dispute while it was pending before the Federal Circuit. The settlement was contingent upon the district court's granting an indicative motion that it would vacate the underlying judgment.

The district court began its analysis by noting that "Federal Rule of Civil Procedure 60(b) grants district courts the authority to relieve a party from a final judgment when 'applying [the judgment] prospectively is no longer equitable' or for 'any other reason that justifies relief.' Fed. R. Civ. P. 60(b)(5), (6). Rule 60(b) 'vests power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.' Klapprott v. United States, 335 U.S. 601, 614-15 (1949). Whether to grant a Rule 60(b) motion 'lies within the sound discretion of the district court.' Neuberg v. Michael Reese Hosp. Found., 123 F.3d 951, 955 (7th Cir. 1997)."

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District Court Strikes Affirmative Defenses of Laches, Waiver, Estoppel and Acquiescence for Lack of Sufficient Detail

April 18, 2016

After the plaintiff filed a Second Amended Complaint against Fieldpiece Instruments, Inc. ("Defendant") for patent infringement, the Defendant filed its an answer raising a series of affirmative defenses to Plaintiff's claims. The Plaintiff then moved to strike several of the Defendant's affirmative defenses as insufficient or improper under Fed. R. Civ. P. 12(f).

The Plaintiff argued that Defendant's fourth affirmative defense, which includes "laches, waiver, estoppel, and acquiescence," is "improper, confusing and fails to give Plaintiff fair notice. As explained by the district court, in support of these four discrete defenses, Defendant's Answer only provided a single, conclusory sentence: "[Plaintiff] is barred in whole or in part from asserting the [patent-in-suit] against Fieldpiece under the equitable doctrines of laches, waiver, estoppel, and/or acquiescence."

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Covenant Not to Sue Insufficient to Warrant Dismissal of Counterclaims Where Covenant Contained Reservation of Rights

April 13, 2016

The plaintiff filed a motion to dismiss the defendants' patent invalidity counterclaims for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. Rule 12(b)(1) because the plaintiff withdrew its patent infringement claims and filed a covenant not to sue regarding those claims. In the motion to dismiss, the plaintiff asserted that the patent invalidity claims are therefore rendered moot by the covenant not to sue.

The district court then noted that in Dow Jones & Co., Inc. v. Ablaise, 606 F.3d 1338 (Fed. Cir. 2010), the court found that the offer of a covenant not to sue for patent infringement for any acts of infringement of a patent (past or future) was sufficient to divest the court of subject matter jurisdiction over a suit for declaratory judgment of invalidity. This was because the covenant "extinguished any current or future case or controversy between the parties." Id. at 1348. The Ablaise court noted that whether a covenant not to sue divests the court of jurisdiction depends on what is covered by the covenant. 606 F.3d at 1346-47. In Ablaise, the plaintiff "on behalf of itself and any successors-in-interest to the '530 patent", released and unconditionally covenanted not to sue Down Jones or any of its subsidiaries or divisions for infringement of the '530 patent "as of the date of this agreement based on Dow Jones' manufacture, importation, use, sale and/or offer of currently existing products or use of methods." Id. at 1345. When Dow Jones asserted that the covenant did not extend to Dow Jones' past products or existing licenses, Ablaise clarified that the covenant extended to past products and use. Id. The Court held that this "extinguishe[d] the controversy" between the parties, and divested the court of its Article III jurisdiction." Id. at 1349.

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District Court Orders Production of Settlement Agreements But Denies Request for Deposition That Would Go Beyond Four Corners of the Agreements

April 11, 2016

Plaintiffs filed a declaratory judgment action seeking a declaration that U.S. Patent No. 7,923,221 (the "Cabilly III patent"), owned by Defendants, is invalid and therefore Plaintiffs do not owe royalties with respect to Praluent. During the case, Plaintiffs requested production of five executed settlement agreements that resolved prior litigations involving the Cabilly II and III patents and also requested a deposition regarding the agreements and the negotiations that led up to the agreements. Defendants represented that it would not use the agreements in the litigation.

The district court began its analysis by noting that "[o]ne potential methodology for valuing a patent is based on comparable licenses. 'Such a model begins with rates from comparable licenses and then 'account[s] for differences in the technologies and economic circumstances of the contracting parties.' . . . The Federal Circuit has rejected the argument that licenses in settlement agreements are categorically irrelevant to a reasonably royalty. 'While the fact that a settlement or settlement offer comes in the midst of litigation may affect the relevance of the settlement or offer, there is no per se rule barring reference to settlements simply because they arise from litigation.' Astrazeneca AB v. Apotex Corp., 782 F.3d 1324, 1336 (Fed. Cir. 2015)."

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District Court Asks Google and Oracle to Consent to Ban on Internet Research of Jury Panel

April 6, 2016

Following up on the district court's previous ruling barring the use of jury questionnaires, the district court addressed the issue of whether any Internet research of the potential jurors should be permitted. After analyzing the reasons to issue an outright ban on such research, the district court explained that it would instead request that the parties agree not to conduct Internet research on the potential jurors.

The district court explained that "[t]rial judges have such respect for juries -- reverential respect would not be too strong to say -- that it must pain them to contemplate that, in addition to the sacrifice jurors make for our country, they must suffer trial lawyers and jury consultants scouring over their Facebook and other profiles to dissect their politics, religion, relationships, preferences, friends, photographs, and other personal information."

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District Court Declines to "Reverse" Bifurcate Trial to Try Damages before Patent Infringement and Calls Motion "Baseless"

April 4, 2016

California Home Spas, Inc. ("CHS") filed a motion to bifurcate the trial between damages and infringement and asserted that the damage trial should proceed first. As noted below, the district court denied the request finding that bifurcation is unusual and that defendant had not justified the unusual procedure in this case.

CHS contended that the damages in this case will be limited and urged the district court to bifurcate the case to first determine the amount of damages in order to facilitate any settlement discussions between the parties. The plaintiff argued that CHS's damages estimates are inaccurate and that bifurcating the case would only serve to delay the ultimate outcome of the case. The Plaintiff also asserted that CHS's motion was part of CHS's ongoing "vexatious and deceitful conduct."

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