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Recent Decision Highlights Discoverability of Funding Arrangements

In a recent discovery dispute in the Northern District of California, Judge Sallie Kim has ordered the plaintiff to produce litigation funding agreements, finding them relevant to potential witness bias. The April 29, 2025 order in Correct Transmission, LLC v. Juniper Networks Inc (Case No. 21-cv-09284-RFL) provides important guidance on when litigation funding arrangements may be discoverable despite work product protection claims.

Case Background

The case involves patent infringement claims brought by Correct Transmission against Juniper Networks. The patents-in-suit have an interesting ownership history, having changed hands multiple times before the current litigation:

  • Originally owned by Orckit Communications (co-founded by CEO Izhak Tamir)
  • After liquidation, purchased by Orckit IP in 2015 (funded by Tamir)
  • Later assigned to Correct Transmission for enforcement and licensing
  • Correct Transmission then entered into litigation funding agreements to monetize the patents

The dispute centered on whether these litigation funding agreements should be produced to the defendant.

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In a significant ruling that could impact patent dispute procedures, Acting United States Patent and Trademark Office (USPTO) Director Coke Morgan Stewart has vacated a Final Written Decision by the Patent Trial and Appeal Board (PTAB) and remanded multiple cases back for further proceedings. The April 24 order addresses procedural issues in a dispute between semiconductor manufacturers and a patent owner that highlight important aspects of inter partes review (IPR) proceedings.

Case Background

The dispute involves petitions filed by Semiconductor Components Industries (doing business as onsemi) and Texas Instruments against patents held by Greenthread LLC. At issue were semiconductor patents (11,121,222 B2 and 10,510,842 B2) being challenged through IPR proceedings IPR2023-01242, IPR2023-01243, and IPR2023-01244.

Director Identifies Key Procedural Errors

Director Stewart’s order identifies several procedural errors that necessitated intervention:

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A federal court in Massachusetts has granted in part a motion for permanent injunction against defendants found liable for misappropriating trade secrets related to an insulin patch pump, imposing several significant remedies including the reassignment of patent applications that incorporate the intellectual property.

The case centered on Insulet Corporation’s Omnipod insulin delivery system, where after a month-long trial, a jury found six defendants liable for misappropriating trade secrets in violation of the Defend Trade Secrets Act (DTSA). The jury awarded Insulet $452 million, consisting of $170 million in unjust-enrichment damages and $282 million in exemplary damages. However, the court ultimately reduced the total damages award to $59.4 million to avoid potential double recovery issues with the injunctive relief.

The court’s April 24, 2025 ruling in Insulet Corporation v. EOFlow Co., Ltd. et al. follows a jury verdict that found the defendants liable for misappropriating four trade secrets belonging to Insulet Corporation, including an occlusion-detection-algorithm (ODA). When addressing Insulet’s request for reassignment of patent applications incorporating aspects of the misappropriated trade secrets, the court explained:

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In a significant reversal for Petitioner Motorola Solutions, the Acting Director of the United States Patent and Trademark Office (USPTO) has granted Stellar LLC’s request for Director Review, vacated the Patent Trial and Appeal Board’s (PTAB) earlier decision instituting inter partes review of four patents, and denied institution.

The March 28, 2025 decision, affecting Stellar, LLC’s U.S. Patent Nos. 7,593,034, 9,485,471, 8,692,882, and 9,912,914, hinged on the application of the Fintiv factors, which guide PTAB discretion in instituting inter partes review when parallel district court proceedings exist. Acting Under Secretary Coke Morgan Stewart found that “the Board’s analysis of factors 3 and 4, and overall weighing of the Fintiv factors was erroneous” and that the Board “did not give enough weight to the investment in the parallel proceeding and gave too much weight to Petitioner’s Sotera stipulation.”

Substantial Investment in Parallel Proceeding

The Director emphasized that by the time Stellar filed its Preliminary Response, the parties had already “served extensive infringement and invalidity contentions, served opening and rebuttal expert reports, filed claim construction briefs, and conducted several depositions.” Additionally, “the court also had held a claim construction hearing and construed the disputed claim terms.” Importantly, the scheduled district court trial date of March 10, 2025, was “eleven months before the Board’s projected final written decision date.” Given these factors, the Director concluded that “factor 3 strongly favors discretionary denial.”

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On March 26, 2025, the United States Patent and Trademark Office (USPTO) announced temporary changes to how the Patent Trial and Appeal Board (PTAB) will manage its workload, particularly concerning America Invents Act (AIA) trial proceedings such as inter partes reviews (IPRs) and post-grant reviews (PGRs).

Key Changes to Institution Decisions

The memorandum, issued by Acting Under Secretary of Commerce for Intellectual Property and Acting Director Coke Morgan Stewart, establishes a bifurcated approach for handling institution decisions:

  1. Separation of discretionary and merits considerations: Decisions on whether to institute an IPR or PGR will be split between discretionary considerations and merit-based/statutory considerations.
  2. Director’s role: “The Director, in consultation with at least three PTAB judges, will determine whether discretionary denial of institution is appropriate.” If denial is appropriate, the Director will issue that decision directly.
  3. Panel review: If discretionary denial is not appropriate, the petition will be referred to a three-member PTAB panel for normal handling, including a decision on institution addressing the merits.

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In a recent decision from the United States District Court for the District of Massachusetts, the district court denied Abbott Laboratories’ motion for summary judgment in a patent infringement case involving multiple pharmaceutical companies. This ruling offers valuable insights into the application of Rule 19 joinder requirements in patent litigation.

The Case: Chr. Hansen HMO GmbH v. Glycosyn LLC

The dispute centers on a patent infringement claim brought by Glycosyn LLC against Abbott Laboratories, with Chr. Hansen HMO GmbH also involved as a plaintiff and counterclaim-defendant. Abbott argued that Glycosyn could not maintain its patent infringement suit without joining another company, Friesland Campina DOMO B.V. (“RFC”), which allegedly had an exclusive licensing agreement with Glycosyn for the patents at issue.

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On March 24, 2025, the USPTO officially reinstated the Fintiv factors framework for discretionary denials in post-grant proceedings with parallel litigation, following the February 2025 rescission of its 2022 Interim Procedure. This significant policy shift returns authority to Patent Trial and Appeal Board (PTAB)  judges to deny institution of inter partes reviews (IPRs) or post-grant reviews (PGRs) when parallel proceedings exist in district courts or the International Trade Commission (ITC), using a multi-factor analysis that weighs timing, resource efficiency, and overall merits. The decision reinforces the USPTO’s priority on preventing duplicative litigation and potentially upholds a higher bar for challenging patents when concurrent proceedings are underway.

The memo, signed by Chief Administrative Patent Judge Scott R. Boalick, informs PTAB members that the USPTO is returning to its previous guidance, including the precedential decisions in Apple Inc. v. Fintiv, Inc. and Sotera Wireless, Inc. v. Masimo Corp.

Key Points from the Memorandum:

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In a recent order in Omega Liner Company, Inc. v. BUERGOFOL GmbH, the Patent Trial and Appeal Board denied Patent Owner’s request to submit new inventor declarations with its sur-reply, highlighting the high bar for introducing new evidence late in inter partes review proceedings.

The case involves Patent 9,657,882 B2, where two inventors, Dr. Boutrid and Mr. Schleicher, previously provided declarations supporting the Patent Owner’s Response. The controversy arose when Petitioner Omega Liner alleged in its Reply that these declarations contained false statements and misrepresentations.

Majority Finds No “Extraordinary Circumstances”

Judge Grace Karaffa Obermann, writing for the majority, emphasized that Patent Owner failed to demonstrate the “extraordinary circumstances” required to deviate from rule 37 C.F.R. § 42.23(b) prohibiting new declaration evidence with a sur-reply.  “Importantly, Patent Owner does not ‘acknowledge, let alone address, its burden to establish ‘extraordinary circumstances’ that could warrant waiving the rule barring new’ declaration evidence with a sur-reply,” the Board noted.

The majority was unconvinced by Patent Owner’s argument that “the only way to raise facts to the Board’s attention is by submission of declaration testimony,” finding it conclusory and insufficient to justify the extraordinary relief requested.  “Patent Owner is free to explain in its Sur-reply why and how the Reply misquotes or misconstrues documents in the record, without reliance on the proposed new declarations,” Judge Obermann wrote.

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In a notable Final Written Decision on Remand, the Patent Trial and Appeal Board (PTAB) conducted a detailed examination of the prior art status of the Krassner reference (US 10,380,602 B2) in the inter partes review between Duration Media LLC and Rich Media Club LLC. This analysis proved central to determining the patentability of claims related to internet advertising viewability testing.

The Intertwined Patent Lineage

Interestingly, the challenged patent (the ‘329 patent) and the Krassner reference share significant DNA. The ‘329 patent is a continuation of application No. 12/384,403, which itself is a continuation-in-part (CIP) of application No. 11/803,779 — the very application from which Krassner issued. This familial relationship was explicitly acknowledged in the decision: “The ‘329 patent states that its underlying application is a continuation of application No. 12/384,403 (“the parent ‘403 application”), filed on Apr. 4, 2009, now Pat. No. 11,004,090, which is a continuation-in-part ((“CIP”)) of application No. 11/803,779 (“the grandparent ‘779 application”), filed on May 16, 2007, now Pat. No. 10,380,602…” Both parties agreed that “the ‘329 patent includes new matter relative to Krassner.” Patent Owner explained this new matter related to “Rich Media Club’s invention of a method to determine if an advertisement on a web page had come within (or was approaching), the viewable portion of a user’s webpage in a browser (sometimes referred to as the ‘viewport’).” As the Board recognized, “Krassner and the ‘329 patent share a significant amount of disclosure, with Krassner issuing from an application in the chain of priority applications identified by the ‘329 patent.”

The § 102(b) Question

Duration Media initially asserted that Krassner qualified as prior art under 35 U.S.C. § 102(b). The Board rejected this theory, noting “[a]s we explained in the Institution Decision, none of these references is prior art under § 102(b) because none was patented or published more than one year prior to April 4, 2009.” Krassner issued on August 13, 2019, far too late to qualify under § 102(b), which requires publication or patenting more than one year before the effective filing date of the challenged patent. Duration Media attempted to argue that a related patent application publication (US 2007/0265923 A1), published November 15, 2007, contained “substantively identical disclosure” to Krassner. The Board firmly rejected this approach: “Petitioner’s resurrected argument is based on a fundamental misunderstanding of § 311(b)… Petitioner requested to cancel the claims of the ‘329 patent on the basis of Badros, Harkins, and Krassner. Petitioner did not base its request, in whole or in part, on the Krassner publication.” Continue reading

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In a significant ruling on the scope of the inter partes review time bar, the Patent Trial and Appeal Board rejected Greenthread’s attempts to dismiss Semiconductor Components’ petition as untimely, providing key guidance on privity relationships under 35 U.S.C. § 315(b).

The decision centered on Greenthread’s argument that the petition was time-barred due to the petitioner’s alleged privity with Intel and other licensees. The Board found these arguments unpersuasive, emphasizing the need for concrete evidence over theoretical relationships.

“The question of whether Petitioner is time-barred under § 315(b) is part of the determination of whether to institute an inter partes review,” the Board noted, citing the Supreme Court’s decision in Thryv, Inc. v. Click-to-Call Tech., LP.

Greenthread’s attempts to establish privity through various business relationships met particular skepticism. The Board emphasized that “a manufacturer-customer relationship does not necessarily suggest a privity relationship, and because Petitioner’s sales to Intel are licensed (as Patent Owner acknowledges), they do not support privity.” Continue reading