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The plaintiff, Bayer, moved to exclude the opinion of the defendant’s damage expert, Dr. Rausser, for failing to show that the licenses that he used for his reasonable royalty analysis were technologically or economically comparable to the license resulting from the hypothetical negotiation.  The district court agreed with Bayer on the economically comparable point and granted the motion to exclude on that basis.

https://patentlaw.jmbm.com/files/2019/02/abstract-art-artistic-251287-pexels-cc0-02.05.2019-300x169.jpgAs explained by the district court, Bayer asserted that the license resulting from the hypothetical negotiation would be a non-exclusive, running royalty license between competitors, and of Dr. Rausser’s four selected licenses, only one was a non-exclusive license, two were between competitors, and none of them used a running royalty.

The district court stated that the strongest argument by Bayer “relates to Dr. Rausser’s use of lump-sum licenses to support a running royalty hypothetical license. ‘Significant differences exist between a running royalty license and a lump-sum license.’ Lucent, 590 F.3d at 1326. A lump-sum license can still be relevant to running royalty damages, but “some basis for comparison” must exist. See id. at 1330. Defendants argue that Lucent is inapposite because here, unlike in Lucent, the parties agree that damages should be in the form of a running royalty. Defendants further argue that, “while it may be difficult to determine a lump sum from a running royalty,” as shown in Lucent, “the opposite is not true.”

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https://patentlaw.jmbm.com/files/2019/01/citrus-citrus-fruit-close-up-52533-pexels2-cc0-01.29.2019-300x289.jpgIn the ongoing litigation war between Qualcomm and Apple, spanning multiple forums around the country, Qualcomm moved to exclude Apple’s technical experts’ reliance on certain license agreements by asserting that the agreement involved technology that was not sufficiently comparable.  After reviewing the license agreements, the experts’ opinions, and the law, the district court concluded that Qualcomm’s motion should be granted.

After reviewing the license agreements at issue (which have been redacted as confidential), the district court explained that “the first question is whether Apple’s technical experts have shown that any patents underlying these License Agreements are technologically comparable to the https://patentlaw.jmbm.com/files/2019/01/apple-close-up-edible-89434-pexels-cc0-01.29.2019-1024x478.jpgpatents at issue here. The Federal Circuit has cautioned “that ‘district courts performing reasonable royalty calculations [must] exercise vigilance when considering past licenses to technologies other than the patent in suit,’ and ‘must account for differences in the technologies and economic circumstances of the contracting parties[.]’” VirnetX, Inc. v. Cisco Systems, Inc., 767 F.3d 1308, 1330 (Fed. Cir. 2014) (citations omitted). “When relying on licenses to prove a reasonable royalty, alleging a loose or vague comparability between different technologies or licenses does not suffice.” LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 79 (Fed. Cir. 2012).

The district court then explained that “Apple’s experts have gone through the License Agreements and found at least one patent from each Agreement that they believe is technologically comparable to the patents in suit. Qualcomm’s motion goes directly to those opinions, and asserts they are conclusory and do not meet the standard for technological comparability.”

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https://patentlaw.jmbm.com/files/2019/01/freerangestock-download-cc0-01.23.2019-300x288.jpgIn a patent infringement action, Takeda Pharmaceuticals America, Inc., and Takeda Pharmaceuticals U.S.A., Inc.’s (collectively, “Takeda”) filed a motion to disqualify Baker Botts, L.L.P. (“Baker Botts”) from representing Defendants Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Limited (collectively, “Zydus”). Takeda moved to disqualify Baker Botts from representing Zydus based on Baker Botts’ alleged previous representation of Ethypharm S.A. (“Ethypharm”) in earlier litigation involving Takeda’s Prevacid® SolutabTM product.

Takeda asserted that the law firm should be disqualified from representing Zydus based on a Common Interest & Confidentiality Agreement (the “Agreement”) Ethypharm entered into with Takeda and TAP Pharmaceutical Products Inc. (“TAP”) in the Delaware Action.

In this regard, Takeda claimed that the Agreement created an implied attorney-client relationship between Takeda and Baker Botts. As explained by the district court, Takeda argued that the current litigation was substantially related to the prior litigation involving Ethypharm, arguing that even though the patent infringement claims were dismissed, leaving only Zydus’ antitrust counterclaims, the matters remained substantially related because the critical issue in deciding Zydus’ antitrust counterclaims is whether Takeda’s assertion of the dismissed patent claims was objectively baseless. Takeda also contended that facts and theories from the prior litigation, including arguments concerning commercial success were relevant and long-felt because, in order to succeed on its antitrust counterclaims, Zydus must establish a monopoly, and, consequently, Zydus has sought discovery on Takeda’s sale and marketing of Prevacid® SoluTab.TM

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National Products, Inc. (“NPI”) filed a patent infringement action Akron Resources, Inc. (“Akron”), among others.  The parties filed several cross motions for summary judgment, including a motion for summary judgment based on the failure to mark.

As explained by the district court, the parties did not dispute that:https://patentlaw.jmbm.com/files/2019/01/aerial-business-computer-1011329-Pexels-CC0-01.14.2019-300x170.jpg

“1) NPI sells products that practice the ’212 Patent;

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https://patentlaw.jmbm.com/files/2019/01/background-close-up-court-1415558-pexels-CC0-01.14.2019-1-300x201.jpgIn this patent infringement action, the plaintiff, Whirlpool Properties (“Whirlpool”) noticed several depositions of third-party witnesses near the discovery cut-off.  The defendant, Filters Fast, moved for an order to stop the depositions.

As explained by the district court, “[t]he crux of the pending motion is that the Whirlpool Plaintiffs emailed Defendant on November 28, 2018, the dispositive motions deadline, attaching two third-party deposition subpoenas that noticed depositions for December 6 in Windsor, Va. and December 7 in Simpsonville, S.C.  Defendant contends that Plaintiffs had never identified these potential witnesses, nor even disclosed the possibility of deposing them.  Moreover, Defendant notes that these newly noticed depositions overlapped with already scheduled depositions of Whirlpool witnesses to be held in Chicago, Il. on December 5, 7, and 11. According to Defendant, Whirlpool Plaintiffs then emailed a notice on December 2, regarding a third third-party witness it intended to depose in Texas on December 11 or 12.”

In opposition, Whirlpool asserted that witnesses in question “were disclosed within three days of confirming them for depositions.”  Whirlpool argued that the notice of depositions in dispute here was “reasonable under the circumstances.” ((citing Fed.R.Civ.P. 30(b)(1)).  Whirlpool further argued that the third-party depositions could have been conducted by the parties’ stipulated extension of the discovery deadline – December 12, 2018. Whirlpool also contended that the depositions address non-complicated issues that would require minimal preparation.

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In this patent infringement action, Stryker moved to strike the expert report of Karl Storz’ (“KSEA”) infringement expert because the expert did not provide any analysis of infringement of the patent-in-suit. As explained by the district court, Karl Storz’ infringement expert’s, Mr. Gould Bear, report included six sections: (1) introduction, (2) summary of conclusions, (3) background and qualifications, (4) materials reviewed, (5) legal principals and methods, and (6) conclusion.

The expert report did not provide any analysis regarding how “the accused products literally include each element of Claims 1, 2 and 3 of the ’420 Patent.” And the district court explained that “[e]ven Mr. Gould Bear’s description of his process is conclusory: ‘I have analyzed literal infringement with respect to each limitation of the asserted patent claim, comparing the accused products – in their ordinary and intended uses – to the invention described in the patent claim they are alleged to infringe. When analyzing a dependent claim, I determined whether the allegedly infringing products include each and every element of the dependent claim, the independent claim from which it depends and all intermediate dependent claims.’ (Id. at 14-15 ¶ 32.)

The expert report made no effort to explain how the expert determined that the allegedly infringing products include each element of the dependent claim and instead just stated he had made that determination.

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The plaintiff Dodocase VR, Inc. filed a motion for a temporary restraining order or preliminary injunction against Defendants MerchSource, LLC (“MerchSource”) and ThreeSixty Brands Group LLC (“ThreeSixty”) (together, “Defendants”) requesting that the court order the Defendants to withdraw certain petitions filed with the Patent Trial and Appeal Board (“PTAB Petitions”).

As explained by the district court, MerchSource designs, sources, and distributes a wide-range of consumer goods, including toys, electronics, and home decor, to large retailers. The plaintiff alleged that MerchSources sells, manufactures, designs, and/or imports certain products under the brand name “Sharper Image” that infringe the Dodocase Patents. In June 2016, MerchSource contacted the plaintiff to obtain a license to the ‘075 Patent, and in October 2016, MerchSource and the plaintiff entered into a Master License Agreement regarding the Dodocase Patents (“MLA”). In June 2017, MerchSource contacted the plaintiff to express dissatisfaction with the MLA and told the plaintiff that MerchSource would “have no choice but to impute a zero percent royalty rate under the [MLA] in order to be similarly advantaged.” MerchSource also later told the plaintiff that it reviewed the claims in the patent application for what would later become the ‘184 Patent and determined that the relevant claims were invalid, so it would not pay any royalties on the products sold under that patent. The plaintiff responded that refusal to pay royalties despite its continued manufacture, use, sale, and/or offer for sale of products using the Dodocase Patents constituted a breach of the MLA.

Defendants then filed three separate PTAB Petitions, challenging each of the three Dodocase Patents, on January 15, 2018. Shortly thereafter, the defendants answered the complaint and filed a counterclaim that sought declaratory judgment that the patents-in-suit are invalid for the reasons set forth in the PTAB Petitions.

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During a jury trial, Ericsson asserted that TCL infringed claims 1 and 5 of U.S. Patent No. 7,149,510 (the “‘510 Patent”) by selling phones and devices that included the Google Android operating system. The jury found that TCL infringed claims 1 and 5, that TCL’s infringement was willful, and awarded $75 million as a lump sum royalty. TCL moved for a new trial on infringement and damages. The district court decided the motion for new trial on damages should be granted for the reasons explained below.

The damage theory Ericsson presented at trial was based on the opinions of Dr. William Wecker and Mr. Robert Mills. Dr. Wecker provided analysis of a consumer survey that, according to Ericsson, approximated the apportioned value of the patented invention. Mr. Mills in turn used Dr. Wecker’s survey results to estimate a per phone royalty rate the parties would have agreed to at the hypothetical negotiation. Dr. Wecker’s survey was designed to determine how many consumers that had purchased an Android-based smartphone during the relevant time would have decided against purchasing the phone if the phone lacked the accused security and permissions feature, i.e.: the ability to control whether third-party applications can access native functionality on the phone. Mr. Mills used Dr. Wecker’s survey results to determine a per phone royalty rate. According to Mr. Mills, Dr. Wecker’s survey results indicated that about 28% of consumers who purchased accused TCL phones would not have made those purchases if the phone lacked the allegedly infringing feature.

The district court concluded that there were at least two independent reasons why a new trial on damages was necessary. “The first and most important is that the manner in which Mr. Mills used Dr. Wecker’s survey results is not based on sufficient facts or data, not the product of reliable principles, and not reliably based on the facts of the case. See Fed. R. Evid. 702; Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579(1993). Namely, Mr. Mills directly translated the roughly 28% of survey respondents who allegedly would not have bought a TCL phone without the infringing feature to TCL’s profit in an effort to determine the potential “at-risk” profit. This step in Mr. Mills’ analysis was unreliable.”

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Feit Electric Company and Feit Electric Company, Inc. (collectively, “Feit”) filed a motion to enforce a subpoena for documents to non-parties Amerlux, LLC and Amerlux Exterior, LLC (collectively, “Amerlux”). The complainant in the ITC proceeding, Philips Lighting North America Corp. and Philips Lighting Holding B.V. (collectively, “Philips”) asserted U.S. Patent Nos. 6,586,890; 7,256,554; 8,070,328; 7,038,399 (“the ‘399 patent”); and 7,262,559 (“the ‘559 patent”) against Feit.

Philips had previously asserted two of the patent—the ‘399 and ‘559 patents—against Amerlux in a patent infringement action in the District of Massachusetts (Koninklijke Philips, NV et al. v. Amerlux, LLC et al., Case No. 1-15-cv-13086). This case was dismissed before Amerlux disclosed its invalidity contentions and, therefore, Amerlux never had to disclose the prior art that it had found.

Feit served a subpoena on Amerlux “seek[ing] all prior art to the Asserted Patents known to Amerlux.” Feit subsequently agreed to limit the subpoena to prior art relating to the ‘399 and ‘559 patents. Amerlux contended that the identity of the prior art—other than the references identified in its answer to the complaint—should be protected by the work-product doctrine.

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The plaintiff filed a motion for protective order to prevent the deposition of its litigation counsel. The district court referred the motion for protective order to the special master for resolution.

The special master framed the issue as whether, plaintiff’s litigation counsel, Mr. Chae should be required to provide testimony and information in discovery. “The parties agree that the applicable standard is set forth in Shelton v American Motors Corp., 805 F. 2d 1323, 1327 (8th Cir., 1986). Essentially, the standard to be applied is that the Court must determine that no other means exist to obtain the information other than to depose the attorney; that the information sought is relevant and non-privileged; and that the information sought is crucial to the preparation of the party seeking the discovery.”

The special master noted that Mr. Chae was the prosecuting patent attorney for the utility patent at issue in this case and was also the prosecuting attorney for four design patents, which are the subject of a separate suit that was consolidated. The special master also noted that the district court had already denied the plaintiff’s Motion to Dismiss and Motion to Strike, noting defendants alleged in their affirmative defenses and Counterclaim that the utility patent is invalid under the doctrine of inequitable conduct “because of the actions of [Mr. Chae], who prosecuted the application that matured into the ‘283 patent.” Further, the district court noted that defendants alleged that Mr. Chae failed to disclose prior art to the USPTO during the ‘283 prosecution, “with the specific intent to deceive the USPTO” and also alleged that Mr. Chae never informed the inventor, Mr. Kim, that he had a duty to submit relevant prior art to the USPTO.

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