Joseph Mellema Joins Jeffer Mangels Butler & Mitchell LLP as Of Counsel in the Patent Litigation Group

October 18, 2016

Jeffer Mangels Butler & Mitchell LLP is pleased to announce that Joseph J. Mellema has joined the Firm as Of Counsel in the Patent Litigation Group. Mellema will be resident in the Firm's Orange County office.

Mellema focuses on the protection and enforcement of all intellectual property rights, including patents, trademarks, copyright, trade secrets, unfair business practices, and antitrust litigation. He has dual degrees in electrical engineering and physical sciences, and was formerly a systems engineer at Raytheon Company working on next-generation sensors and systems for the Navy's F/A-18 Super Hornet.

"Joe has experience litigating highly technical patents in a variety of industries, making him a great addition to our team," said Stan Gibson, chair of the Patent Litigation Group. "Our patent litigation attorneys have a deep understanding, and often first-hand experience, with the technologies our clients rely on us to protect."

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District Court Concludes that Plaintiff Is Collaterally Estopped from Asserting Two Related Patents After Court in Another Jurisdiction Found one of the Patents Invalid under Alice

October 18, 2016

In this patent infringement action, the Defendant moved for dismissal based on collateral estoppel and Alice contending that a prior district court had found the patents invalid for lack of patentable subject matter. Before applying the two-step Alice test, the district court took "judicial notice of the fact that Patent '046 was found invalid in Joao Control & Monitoring Systems, LLC v. Telular Corp., -- F. Supp. 3d --, 2016 WL 1161287 (N.D. Ill. Mar. 23, 2016).

In analyzing the collateral estoppel issue, the district court noted that "the Supreme Court has held that a defense of issue preclusion applies where a party is 'facing a charge of infringement of a patent that has once been declared invalid,' even though the party asserting the defense was not a party to the action where the patent was invalidated." Soverain Software LLC v. Victoria's Secret Direct Brand Mgmt., LLC, 778 F.3d 1311, 1315 (Fed. Cir. 2015) (quoting Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 349-50 (1971)).

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District Court Denies Motion for Preliminary Injunction Where Inter Partes Review ("IPR") Pending on Claims from Different Patent But Similar to Patent-In-Suit

October 14, 2016


In earlier patent infringement litigation, the Plaintiff sued Ancestry.com DNA, LLC ("Ancestry") in the District of Delaware ("Delaware litigation") alleging infringement of U.S. Patent Number 8,221,381 (the "'381 patent"). Ancestry subsequently filed an IPR seeking review of several claims of the '381 patent, and the PTAB issued an institution decision finding that Ancestry "ha[d] demonstrated a reasonable likelihood that it would prevail in showing that claims 1, 2, 4, 5, 7, 8, 11, 12, 15-17, 20, 41, 44, and 49 of the '381 patent are unpatentable."

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District Court Refuses to Amend Protective Order to Permit Expert, Who Was Former Employee of Competitor, to Review Confidential Documents

October 12, 2016

In this patent infringement action, the defendant, High 5 Games ("High 5"), moved for an order overruling the plaintiff's, Konami Gaming, Inc. ("Konami"), objection to an expert witness viewing confidential information. In the alternative, High 5 moved to amend the stipulated protective order signed by the parties.

As explained by the district court, the stipulated protective order entered into by the parties stated that for purposes of access to confidential documents, an "expert" is "a person with specialized knowledge or experience in a matter pertinent to the litigation who . . . is not a past or current employee of a Party or of a Party's competitor."

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CG Technology v. DraftKings District Court Stays Discovery Pending Motion to Dismiss Challenging Validity of Asserted Patents Under Alice

October 6, 2016

DraftKings filed a motion to stay discovery until the district court had an opportunity to rule on the a motion to dismiss. The motion to dismiss asserted that all of the ten patents-in-suit were invalid because they claimed patent-ineligible subject matter. CG Technology opposed the motion.

The district court began its analysis by noting that the Federal Rules do not provide for automatic or blanket stays of discovery when a potentially dispositive motion is pending. Tradebay, LLC v. eBay, Inc., 278 F.R.D. 597 (D. Nev. 2011) (citation omitted). But the district court also noted that as a general matter, courts have broad discretionary power to control discovery. See e.g., Little v. City of Seattle, 863 F.2d 681, 685 (9th Cir. 1988). In determining whether to stay discovery, and in light of the directive in Rule 1 to construe the Federal Rules of Civil Procedure in a manner to "secure the just, speedy, and inexpensive determination of every action," the preferred approach is that set forth previously in Twin City Fire Insurance v. Employers of Wausau, 124 F.R.D. 652 (D. Nev. 1989).

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Oracle v. Google: Violation of Protective Order to Disclose Confidential Information in Open Court

October 4, 2016

In this long standing litigation between Oracle and Google, a dispute arose over the protective order and whether the disclosure of certain information violated the terms of the protective order when it was disclosed in open court. The district court explained that "[b]y long tradition, when a lawyer wishes to reveal in open court information whose disclosure is restricted by a protective order, the lawyer must first explain the restriction to the judge and (i) ask to seal the courtroom and transcript or (ii) hand up a copy of the restricted information to the judge."

The district court then acknowledge that this practice "is not explicitly stated in our model protective order (or in the similar protective order adopted in this case), but this practice necessarily flows from the restrictions that are explicit, namely a limited list of allowed recipients that plainly omits the public. Of course, 'the court and its personnel' are usually allowed recipients but that phrase does not mean 'the court, its personnel, and the public.' Otherwise, the recipe for Coca-Cola or any other highly private information could be blurted out in open court. No one has ever claimed otherwise -- until this case."

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District Court Holds that Document Retention and Destruction Policies Are Privileged under Court's Default Discovery Standard

September 29, 2016

In this patent infringement action, the plaintiff sought production of the defendant's document retention and document destruction policies. The defendant asserted that the request sought information protected by work product and attorney-client privilege. The plaintiff argued that the documents were merely corporate policies that could not be privileged.

The district court analyzed the issue by reviewing the court's Default Discovery Standards and concluded that these policies are protected under those standards.

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District Court Declines to Vacate Ruling That Patent Is Invalid for Covering Unpatentable Abstract Ideas after the Parties Settled the Case with an Appeal to the Federal Circuit Pending

September 27, 2016

The Plaintiffs filed a patent infringement action against the defendant, Netskope, accusing Netskope of infringing U.S. Patent Number 7,305,707 (the "707 Patent"). Netskope filed a motion for judgment on the pleadings, which the district court granted finding that the asserted claims for the 707 Patent were unpatentable abstract ideas. The district court subsequently entered judgment in favor of Netskope, invalidating the '707 Patent.

After the Plaintiffs filed an appeal with the Federal Circuit, the parties settled the case and the Federal Circuit remanded the case back to the district court. The Plaintiffs then filed an unopposed motion to vacate the district court's judgment invalidating the '707 Patent.

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Plaintiff Granted Dismissal Based on Covenant Not to Sue Even With Motion to Dismiss for Lack of Patentable Subject Matter Pending

September 22, 2016

The plaintiff, Shipping and Transit, LLC ("Plaintiff"), filed a patent infringement action against Defendant Neptune Cigars, Inc. ("Defendant"), for infringement of U.S. Patent Nos. 6,415,207 ("the '207 Patent") and 6,763,299 ("the '299 Patent"). The Defendant filed a motion to dismiss on the ground that the patents are directed to ineligible subject matter under 35 U.S.C. § 101.

Instead of opposing the motion to dismiss on the merits, the Plaintiff issued a covenant not to sue to the defendant. The Plaintiff then argued that the covenant not to sue removed any actual controversy between the parties and that the case should be dismissed based on a lack of subject matter jurisdiction.

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District Court Excludes Damage Expert's Opinion Based On Faulty Royalty Calculation

September 20, 2016

In this patent infringement action between Finjan and Sophos, the district court had previously granted a motion to exclude Finjan's damage expert. The district court explained that the expert's, Layne-Farrar, "method of applying a royalty rate to an apportioned base for each patent and adding the resulting royalties was not reliable because under her apportionment method she had attributed the full value of certain features of Sophos's products to multiple patents and so had counted the value of these features multiple times."

The district court concluded that this methodology "functioned to inflate Layne-Farrar's royalty base and her final damages calculation." Nonetheless, the district court permitted the expert to submit a supplemental report. Sophos then moved to exclude the supplemental report as well.

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District Court Denies Request to Preclude Defendant from Sharing Confidential Information of Plaintiff with PTAB as part of Inter Partes Review

September 15, 2016

In this patent infringement action between Ultratec and CaptionCall, CaptionCall filed a motion for relief from the stipulated protective order in order to use confidential commercial information from Ultratec (the plaintiffs) in an inter partes review of Ultratec's patent. CaptionCall wanted to use the information to rebut Ultratec's contention that secondary considerations support the validity of the patent.

Ultratec opposed the motion and contended that confidential information presented to the PTAB would necessarily be disclosed to the public if the PTAB bases its decision on that information.

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District Court Stays Litigation Pending Inter Partes Review ("IPR") over Defendant's Objection That Summary Judgment Motion Should be Determined First

September 13, 2016

After the Patent Trial and Appellate Board ("PTAB") instituted inter partes review ("IPR") of all asserted claims in three of the Patents-in-Suit and with the PTAB's decision on FMC's petition for IPR of the fourth challenged patent pending, the district court received briefs on whether the case should be stayed pending the IPRs.

The district court analyzed the issued by nothing that it had authority to stay the case pending IPRs based on a three factor test. See, e.g., Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842, 848-49 (Fed. Cir. 2008) (citing 35 U.S.C. § 318). "District courts typically analyze stays under a three-factor test: (i) whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-moving party; (ii) whether a stay will simplify the issues in question and trial of the case; and (iii) whether discovery is complete and whether a trial date has been set." Murata Mach. USA v. Daifuku Co., Ltd., __ F.3d __, 2016 WL 4073320, *3 (Fed. Cir. Aug. 1, 2016).

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District Court Precludes Damage Expert from Using a Settlement Agreement to Derive a Reasonable Royalty Calculation Where Expert Employed a Likelihood of Liability Estimate Based Solely on a Study That Patent Holders Prevail Approximately 40 Percent

September 8, 2016

MAX Encryption Technologies ("MAZ") filed a patent infringement action against Blackberry for patent entitled "Method of Transparent Encryption and Decryption for an Electronic Document Management System," U.S. Patent No. 6,185,681 (the "'681 patent"). As the case progressed toward trial, Blackberry filed a motion to exclude the testimony of MAZ' damages expert, Chase Perry.

As explained by the district court, "[i]n reaching his baseline estimate for damages, Mr. Perry relied on a previous license agreement involving the patent-in-suit. The previous license agreement, however, was made in the context of settling a litigation dispute, and thus did not reflect the royalty the parties would have reached 'just before infringement began.' Therefore, the damages amount arrived at in the settlement agreement had to be translated into a damages number that the same parties would have arrived at just before infringement began had they, instead, assumed that the patent was infringed and valid. This implies that the amount of the previous settlement would need to be increased to arrive at the royalties that would have been agreed to in a hypothetical negotiation.'

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District Court Orders Production of Source Code in Searchable Format

September 6, 2016

The plaintiff, [24]7 Customer, Inc. ("[24]/7"), filed a lawsuit against Defendant LivePerson, Inc. ("LivePerson") alleging that LivePerson infringed several patents pertaining to a customer engagement software platform. After the lawsuit was filed, the parties entered into a stipulated protective order in which the parties agreed that "[a]ny source code produced in discovery shall be made available for inspection, in a format allowing it to be reasonably reviewed and searched, during normal business hours or at other mutually agreed times, at an office of the Producing Party's Counsel or another mutually agreed upon location."

Furthermore, the Protective Order provided that "[a]ll source code shall be made available by the Producing Party to the Receiving Party's Outside Counsel of Record and/or experts on a secured computer in a secured room without Internet access or network access to other computers, as necessary and appropriate to prevent and protect against any unauthorized copying, transmission, removal or other transfer of any source code outside or away from the computer on which the source code is provided for inspection (the "Source Code Computer" in the "Source Code Review Room").

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Grecia v. McDonald's: District Court Grants Motion to Dismiss Where McDonald's Could Not "Use" System for Patent Infringement Claim Because Credit Card Companies Controlled the Entire System

September 1, 2016

The plaintiff, Grecia, alleged that McDonald's infringe certain claims of U.S. Patent No. 8,533,860 ("the '860 patent") and of U.S. Patent No. 8,402,555 ("the '555 patent") through its use of the "tokenization systems" of several credit card companies.

As explained by the district court, Grecia alleged that McDonald's uses the claimed systems when a McDonald's customer purchases a McDonald's food item with a credit card, the credit card company's server acts as a receipt module by receiving the primary account number ("PAN") assigned to the credit card. The credit card company's authentication module authenticates the PAN with the issuer of the credit card. Then the credit card company's connection module establishes a connection between the credit card company's payment processor and its token service provider. A token is data that serves as a surrogate for the PAN.) The payment processor then acts as a request module and requests from the token service provider the token associated with the PAN. The payment processor then acts as the second receipt module by receiving the token.) The credit card company then writes the token to the token vault, or branding module, so that when the same credit card is used for subsequent McDonald's purchases, the token associated with the PAN is available to be cross-referenced.

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