Patent Lawyer Blog

Plaintiff Homeland Houswares, LLC ("Homeland") filed a declaratory judgment action for a declaration of non-infringement and invalidity against Sorensen Research and Development Trust ("Sorensen"). Homeland took the deposition of one of the inventors of the patent-in-suit, Mr. Paul Brown. Mr. Brown is the co-inventor of U.S. Patent No. 6,599,460 (the '460 patent), which Homeland's products allegedly infringe. In addition to being a co-inventor, Mr. Brown also conducted testing in support of the patent infringement allegations.

During the deposition of Mr. Brown, Homeland asked the inventor several hypothetical questions which he was instructed by counsel for Sorensen not to answer. Homeland filed a motion to compel answers to the deposition questions.

In a patent case pending before Judge Selna in the Central District of California, Defendant Nestlé USA, Inc. ("Nestlé") moved pursuant to Rule 12(b)(6) to dismiss Plaintiff Network Signatures, Inc.'s ("NSI") infringement claims under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). The Court denied Nestlé's motion finding that NSI's complaint alleged enough facts to plausibly state a claim for direct, indirect and willful infringement.

The Court recited the well established legal standard for attacking a complaint under Twombly and Iqbal:

In resolving a Rule 12(b)(6) motion under Twombly, the Court must follow a two-pronged approach. First, the Court must accept all well-pleaded factual allegations as true, but "[t]hread-bare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Most succinctly stated, a pleading must set forth allegations that have "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 1940. Courts "'are not bound to accept as true a legal conclusion couched as a factual allegation.'" Id. at 1950 (quoting Twombly, 550 U.S. at 555). "In keeping with these principles[,] a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Iqbal, 129 S.Ct. at 1950.

Second, assuming the veracity of well-pleaded factual allegations, the Court must "determine whether they plausibly give rise to an entitlement to relief." Id. at 1950. This determination is context-specific, requiring the Court to draw on its experience and common sense; there is no plausibility "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct." Id.

Plaintiff, Imaginal Systems, LLC ("Imaginal") filed a patent infringement action against Leggett & Platt, Inc. ("Leggett") and Simmons Bedding Company ("Simmons") over three patents, which pertain to automatic stapling machines and a method of manufacturing box spring mattresses. The district court ruled on summary judgment that Imaginal's patents were valid and that the defendants directly infringed the patents. The district court subsequently held a bench trial on issues of willfulness and equitable defenses. After the district court concluded that the infringement was not willful and rejected the equitable defenses, the district court conducted a jury trial on the issue of damages and the jury returned a $5 million verdict in plaintiff's favor.

As the district court explained, "[a]t trial, Plaintiff asked for a damages award based on a running royalty. According to Plaintiffs expert, a reasonable royalty in this case was $15,933,037 as of the end of 2011. Defendants, on the other hand, argued that a running royalty for an automatic stapling machine is not prevalent in the bedding industry and asked the jury to limit the damages award to $296,621. The jury returned a verdict of $5,000,000 in Plaintiff's favor."

The defendant filed a motion to stay pending reexamination of the plaintiff's patent. The district court noted that the plaintiff and defendant are both participants in the oxygen concentrator market. Inogen filed the action on November 4, 2011 asserting infringement of two of its patents. On February 8, 2012, Inova filed a request for inter partes reexamination of both of the patents-in-suit. The PTO acknowledged receipt of the reexamination request and the district court noted that the PTO must decide whether to grant the reexamination request within three months.

After discussing the relevant case law on stays pending reexamination, the district court analyzed the stage of the litigation, simplification of issues, undue prejudice or clear tactical disadvantage to the plaintiff, With respect to the stage of the litigation, the district court noted that Imogen implicitly conceded that the case is in an early stage of litigation and that no discovery dates or trial dates would be set until mid-April. Accordingly, the district court found that this factor weighed in favor of a stay.

Cambrian Science ("Cambrian") filed a second amended complaint that alleged patent infringement of U.S. Patent No. 6,777,312 (the "'312 Patent"). The second amended complaint alleged infringement against several defendants, certain of which were labeled by the district court as "Customer Defendants." As to the Customer Defendants, Cambrian asserted that they infringed the '312 Patent directly by making, using, selling or offering to sell certain systems. The second amended complaint also alleged claims for contributing and inducing infringement.

On summary judgment, the district court determined that the defendants directly infringed all patents at issue in the lawsuit. The district court subsequently conduct a bench trial on issues of willfulness and on defendants' equitable defenses, particularly whether the defenses of laches and equitable estoppel provided a defense to the finding of direct infringement.

The district court first focused on the issue of willful infringement and stated the two-prong test for willfulness. "To establish willful infringement, a patentee must satisfy a two-pronged test. In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007). First, the patentee must "show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent." Id. In analyzing this prong, "[t]he state of mind of the accused infringer is not relevant." Id. Second, and only after "[the objective prong] is satisfied, the patentee must demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer." Id."

Plaintiff NetAirus Technologies ("NetAirus") contended that Apple was infringing U.S. Patent No, 7,103,380 (the "'380 Patent"), which pertains to a method in which a handset device communicates wirelessly over both local area networks and wide area networks. NetAirus claimed that the iPhone 3G and later models infringed the '380 Patent by switching between a cellular data network and local Wi-Fi hotspots. Apple moved for summary judgment contending that the '380 Patent was invalid.

K Tech Telecommunications ("K Tech") filed patent infringement actions against Time Warner and DirecTV. DirecTV and Time Warner moved to dismiss the patent infringement complaint for failure to state a claim or, in the alternative, for a more definite statement. K Tech owns several patents that are directed toward particular ways of updating certain channel information associated with certain digital television signals.

As explained by the district court, "[a]ccording to Plaintiff, full-power television stations identify individual television programs carried by a digital television signal transmitted over the air using a major channel number, a minor channel number, and/or a carrier frequency. Plaintiff's patents explain that when a television translator facility receives a broadcast, translates it to a new frequency, and rebroadcast it, so-called Program and System Information ("PSIP") data associated with the transmission, including channel number and carrier frequency, might not be updated. Plaintiff's patented inventions enable a television translator facility to update the PSIP table with proper channel and carrier frequency information."

Defendant Farpointe Data ("Farpointe") served invalidity contentions on HID Global that identified twenty-two prior art patents, as well as many devices and publications that Farpointe alleges constitute prior art. After the invalidity contentions were served, the parties exchanged claim construction positions and a claim construction hearing was held later in the year. The district court followed HID Global's recommendation and declined to construe some of the claims presented by the parties, which Farpointe argued caused it to revisit the invalidity contentions. As a result, Farpointe sought to add four patents and two HID Global products to the invalidity contentions.

The district court noted that it was following the Local Patent Rules from the Northern District of California and under Patent Local Rule 3-6, a party may amend its preliminary contentions "only by order of the Court upon a timely showing of good cause." The party seeking to amend its contentions bears the burden of establishing due diligence and must show "that it was diligent in moving to amendment of the invalidity contentions and diligent in discovering the basis for the proposed amendment."

Plaintiff Intertainer, Inc. brought an action for patent infringement against Defendant Hulu, LLC. Hulu moved to dismiss Intertainer's first amended complaint pursuant to Fed.R.Civ.P. 12(b)(6). In the first amended complaint, Intertainer alleged infringement of a patent entitled, "Method for Interactive Video Contention Programing," which according to the district court, "relates to a method of creating and streaming an interactive video stream permitting a user to view ancillary content, such as advertisements."

Intertainer also alleged that the interactive video program includes an interface which when selected, displays ancillary material for the user and interrupts the running of the video and when the user returns to watching the video content, the video program resumes streaming from the point in time at which it was interrupted. Intertainer's first amended complaint alleged that Hulu operated a website at www.hulu.com, which displays video content to users over the Internet and that the Hulu media player displays video content and video advertisements as well as advertising banners on its website.

Intertainer further alleged that users watching videos on the Hulu website can choose to view additional advertising content by clicking on the advertisement or the advertisement banner, which will then direct the user to another webpage displaying the advertisement content and will interrupt the streaming of the content from the web server. The video content can be resumed when the user returns to the Hulu website and clicks play. Intertainer contended that these steps directly infringed the patent-in-suit.

In IP Power Holdings Ltd. v. Bam Brokerage Inc., SACV 11-01234-JVS (ANx) (C.D. Cal.), IP sued Bam for infringement of U.S. Patent No. 5,975,626. Shortly after filing its answer, which alleged in part that the '626 patent was invalid, on November 2, 2011, Bam filed a request for an ex part reexamination of the '626 patent. Bam then moved for a stay of the district court action. Despite the fact that the PTO had not yet granted Bam's request, Judge Selna granted Bam's motion, stating that:

Although many courts have focused on the stage of the proceedings, the extent to which a stay would simplify the issues in the case, and the prejudice to the nonmoving party, absent any controlling precedent limiting the inquiry to these elements, the Court finds that the analysis is not so limited but rather that "the totality of the circumstances governs."

Plaintiff filed a patent infringement action against several defendants. After the district court's Markman decision, the parties filed cross-motions for summary judgment regarding patent infringement and the scope of damages. After denying the parties' respective cross-motions for summary judgment, the district court addressed the defense motion for a limitation on damages due to plaintiff's failure to properly mark his device.
The defendant argued that even if it did infringe the patent-in-suit, plaintiff would not be entitled to any damages for any infringement between the issuance of the patent and the filing of the complaint because plaintiff failed to mark his product with the patent number.

As the district court noted, "[a] patentee may only recover damages for patent infringement that occurs after the patentee provides notice to an accused infringer under 35 U.S.C. § 287(a)." Notice can be satisfied either by constructive notice or actual notice. Constructive notice is satisfied if the patentee marks the product consistently and continuously with the word patent or "pat." and the patent number or, if the product cannot be marked, the product's packaging can be marked. Actual notice is satisfied by an affirmative communication from the patentee regarding a specific charge of infringement by a specific accused product or device.

It is now a little more than a year since the Supreme Court decided Bilksi v. Kappos; however, understanding what subject matter falls outside Section 101 remains elusive. The Federal Circuit's decision in Ultamercial, LLC v. Hulu, LLC, emphasizes that Section 101 is to be interpreted broadly. Case No. 2010-1544 (Fed. Cir. September 15, 2011) (before Rader, Chief Judge, Lourie and O'Malley, Circuit Judges) (opinion by Chief Judge Rader). Indeed, in stating "as § 101 itself expresses, subject matter eligibility is merely a threshold check; claim patentability ultimately depends on 'the conditions and requirements of this title,' such as novelty, nonobviousness, and adequate disclosure", it appears that the Federal Circuit may be diminishing - at least in litigation - the significance of Section 101 as a requirement to patentability. Opinion at 6. Many in the patent bar thought Bilski might signal the death of business method patents, but perhaps, as with Mark Twain, the reports of its death were greatly exaggerated.

Ultramercial's U.S. Patent No. 7,346,545 (the "'545 patent") "claims a method for distributing copyrighted products (e.g., songs, movies, books) over the Internet where the consumer receives a copyrighted product for free in exchange for viewing an advertisement, and the advertiser pays for the copyrighted content." Opinion at 2. Claim 1 of the '545 patent consists of the following steps:

Plaintiffs filed a lawsuit for patent infringement, unfair competition and breach of fiduciary duty against several defendants, including AIM Sports. Plaintiffs design, develop and distribute firearm related tools, accessories and sporting optics. Defendants and plaintiffs had a business relationship that permitted Defendants to access trade secret information that belonged to the plaintiffs, including trade secrets regarding manufacturing, product development and plaintiffs' patented products. After the plaintiffs sued defendants for patent infringement and settled the lawsuit, plaintiffs discovered that defendants had formed a new company that continued to infringe the patent and violated the settlement agreement.

After both parties filed motions to compel the production of documents, the Magistrate Judge granted both motions in part and denied both motions in part. Plaintiffs' motion with respect to two of the requests was denied because the defendants represented in declarations signed under penalty of perjury that they had no responsive documents. Plaintiffs then conducted fact witness depositions and alleged, after conducting these depositions, that defendants had withheld responsive documents and that declarations filed with the district court were false. At this point, the Magistrate Judge granted plaintiffs' motion, ordered the production of the responsive documents and ordered defendants to file new declarations. When the defendants failed to produce the financial and design documents sought and filed no new declarations, the plaintiffs moved for monetary sanctions and evidentiary sanctions.

A recent decision from the Central District of California held that a deposition of the author of source code, or similar engineers, cannot be withheld until the producing party, i.e., the party providing the witness, is satisfied that the pinpoint infringement contentions are sufficient. In so holding, the Court indicated that such a determination typically is fact-specific and that given the circumstances in this case the deposition was relevant and not an abuse of the discovery process.

In this instant case, the defendant took the position that until the plaintiff provided sufficient pinpoint citations to the source code, it would not permit the deposition of its principal systems architect over its source code. The defendant expressed its concern that, absent such pinpoint citations, the plaintiff would use the deposition as a "fishing expedition." The plaintiff, on the other hand, argued that it could not supplement its infringement contentions to provide pinpoint citations to the source code until it took the deposition. Both sides supported their positions with expert testimony. Thus, the Court was faced with the proverbial "chicken and egg question."