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In this patent infringement action, Apple moved to exclude Masimo’s damage theory on lost profits for failure to disclose during discovery. As explained by the district court, Masimo presented its lost profits theory based on the equation: “Lost profits = Apple Watch units sold x Masimo’s per-unit profit.” Masimo claimed that the equation breaks down and is supported as follows:

  • Apple Watch units sold from Q4 2018 to Q1 2023 (i.e., from the first sale of an Apple Watch to present), including Series 4-7
  • Masimo’s sensor module price of $100
  • Masimo’s gross profit margin (overall as a company) of 65% (or, alternatively, subtracting the cost to build each sensor module from the $100 price)

The district court analyzed whether each of these “building blocks” were adequately disclosed by Masimo.

With respect to the first building block, sold units of Apple Watches, the district court determined “that Plaintiffs did not disclose during fact or expert discovery (1) the subset of Apple Watch models and sales units on which they now intend to rely at trial; or (2) an explanation of why this subset of units properly informs lost profits.” Masimo’s reliance on Apple’s disclosure of total watches sold was insufficient because Massimo was not contending that all watches were part of the lost profits theory. Continue reading

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In this ongoing patent infringement action, the District Court continued to issue rulings on the Daubert motions filed by the defendant, Labcorp.  Ravgen’s technical expert, Brian Van Ness, offered two opinions: (1) the asserted claims, which are all method claims, are infringed by offering to sell and/or sale; and (2) there are induced infringement and willful infringement with the requisite intent.  Labcorp moved to exclude both opinions as contrary to the law.

With respect to the first opinion, whether method claims can be infringed by a sale or an offer for sale, the district court explained that Chapter 35 of the United States Code, Section 271(a) provides: “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term therefor, infringes the patent.”  The district court also explained that the Federal Circuit stopped “an inch away from deciding the broader question of whether a method claim may be infringed under the ‘sells’ and ‘offer to sell’ prongs of § 271(a).” Isis Pharms., Inc. v. Santaris Pharma A/S Corp., No. 3:11-CV-2214-GPC-KSC, 2014 WL 2531973, at *3 (S.D. Cal. June 4, 2014) (interpreting NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1320–21 (Fed.Cir.2005)).

After noting the above and that this unanswered question has caused a split of authority, the district court joined “the group of courts that have ruled that a patent holder may not base its infringement claims on the sale or offer for sale of a patented method. To be infringed, a method must be performed.” Continue reading

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In this patent infringement action, Ravgen asserted that Labcorp infringes claims of its 727,720 and 7,332,277 patents (the “’720” and “’277” patents through four cell-free DNA-based tests, each of which are non­invasive prenatal tests (“NIPT”)) and Resolution ctDx Lung Assay (“ctDx”) (a liquid biopsy test for cancer). Labcorp moved to exclude certain opinions of Ravgen’s damages expert.

As explained by the district court, in support of its claims against Labcorp, Mr. Meyer, Ravgen’s damages expert, provided a reasonable royalty opinion based on a Georgia-Pacific hypothetical negotiation analysis. In that analysis, Mr. Meyer relied on several agreements to inform the appropriate royalty, including five Ravgen Agreements that granted licenses to the asserted patents, which each cover NIPT and/or liquid biopsy tests. He also relied on three Sequenom Agreements (the “Sequenom-Quest,” “Sequenom-Mayo,” and “Sequenom-ISIS” Agreements) involving technology comparable to the asserted patents. Based on these Agreements and the apportionment built into the royalties contained in those agreements, Mr. Meyer determined a per-unit royalty for the hypothetical license to Labcorp.

In its motion, Labcorp asserted that the following opinions of Mr. Meyer should be excluded: (1) his calculation of reasonable royalty (up to $290 million) for failure to undertake the legal requirement of apportionment; and (2) his use of and any reference to the Ravgen Agreements in forming his opinions, because they lack sufficient comparability to the hypothetical license. Labcorp asserted that Mr. Meyer effectively invokes the entire market value rule (“EMVR”), as he calculated his reasonable royalty using the revenues attributable to the entire market value of the accused tests and he did so by using the ASP (average sales price) as the royalty base for the accused tests. Continue reading

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Arigna filed a patent infringement action against various vehicle manufacturers that alleged infringement of U.S. Patent No. 7,397,318 (“‘318 Patent”). The ‘318 Patent is direct toward a voltage control oscillator for use in a microchip incorporated in radar modules provided by vehicle parts manufacturer Continental.

After Toyota notified Continental of the lawsuit, Continental filed a declaratory judgment action and Arigna amended its complaint to include Continental as a defendant. The defendants subsequently filed a summary judgment motion with respect to the claim for willful infringement.

In analyzing the motion for summary judgment, the district court explained that “Enhanced damages under § 284 are predicated on a finding of willful infringement.” SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1310 (Fed. Cir. 2019) (“SRI II”). Willful infringement is a question of fact merely requiring a finding of deliberate or intentional infringement. SRI Int’l, Inc. v. Cisco Sys., Inc., 14 F.4th 1323, 1330 (Fed. Cir. 2021), cert. denied, 142 S. Ct. 2732 (2022) (“SRI IV”) (citing Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020)); WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (“We do not interpret Halo [Electronics, Inc. v. Pulse Electronics, Inc., 136 S.Ct. 1923] as changing the established law that the factual components of the willfulness question should be resolved by the jury.”). Continue reading

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On July 26, Stan Gibson will participate in a Strafford webinar discussing considerations that need to be taken into account when in-house counsel is noticed or subpoenaed for a deposition. Program details and a registration link are below. We hope to see you there!

Taking or Defending Depositions of In-House Counsel: Strategic, Substantive, and Ethical Considerations

Date: Tuesday, July 26, 2022

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In this patent infringement action, Plaintiff Eagle Eyes Traffic Industry USA Holding LLC (“Eagle Eyes”) filed a motion for an order compelling Defendant E-Go Bike LLC (“E-Go”) to provide responses to Eagle Eyes’ requests for production of documents (“RFPs”), interrogatories (“rogs”), and requests for admission (“RFAs”).   After noting that E-Go’s counsel conceded that the requests were properly served by e-mail, the court addressed E-Go’s explanation for failing to respond to the discovery:

E-Go’s explanation for its failure to respond is that the company ceased operations toward the end of last year, and it was difficult for U.S.-based counsel to obtain information from the pertinent former E-Go employee due to Covid lockdown in Shanghai and surrounding cities. That is a reasonable explanation for why it was difficult to produce documents or provide substantive information that counsel did not possess. But it does not constitute an explanation for why U.S. counsel based in Pleasanton, California did not serve written responses and objections. Drafting objections is an exercise of legal judgment under U.S. law, and a Chinese ex-employee would have been no help with that anyway.

The court then turned to appropriate remedies.  The court noted that there was no good cause for failing to submit objections to requests (even if substantive responses could not have been provided) and therefore found that any objections to requests were now waived. Continue reading

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In this patent infringement action, the plaintiff Flect LLC (“Flect”) moved to voluntarily dismiss its action against the defendant, Lumia Products Co. LLC (“Lumia”), pursuant to Fed.R.Civ.P. 41(a)(1). Flect’s request for voluntary dismissal included language stating that each party will bear its own costs. Rule 41(a)(1) provides: “Voluntary Dismissal.

(1) By the Plaintiff.

(A) Without a Court Order. Subject to Rules 23(e), 23.1(c), 23.2, and 66 and any applicable federal statute, the plaintiff may dismiss an action without a court order by filing:

(i) a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment …” Continue reading

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Via Vadis, LLC and AC Technologies, S.A. (“Plaintiffs”) are the owner and exclusive licensee, respectively, of U.S. Patent No. RE40,521 (the “’521 Patent”) for a data access and management system. Plaintiffs accused Defendant Amazon.com, Inc. (“Amazon”) of direct and indirect infringement of the ’521 Patent through Amazon’s software-as-a-service and related services “by supporting the BitTorrent protocol, or other infringing peer to peer file distribution protocol, to transfer files and other data between electronic devices, such as computers.”

Amazon filed a motion to exclude the opinion of Plaintiffs’ damages expert, Paul Benoit, asserting that Benoit improperly based his damages theory on revenue for Amazon’s entire cloud storage service (Simple Storage Service or “S3”). Amazon contended that the non-accused features of that service account for more than 99.999 percent of its revenue and that Benoit violated the entire market value rule by basing his damages analysis on Amazon’s S3 revenue, “rather than looking to the revenue Amazon received or projected to receive from the usage of the BitTorrent interface.”

In opposing the motion, Plaintiffs asserted that Benoit had “articulated evidence reflecting the importance of price as a driver of sales of S3 services, and thus the economic footprint of the invention would not only reflect revenue generated from data transmitted via BitTorrent, but also the ability to attract customers to Amazon’s S3 by reducing the effective price of the service.”

As the district court explained, “[t]he heart of the parties’ disagreement thus is whether the entire market rule is implicated by starting the royalty calculation with total S3 revenues – notwithstanding subsequent apportionment – rather than the market value for the BitTorrent service.” Continue reading

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The Defendant, International Paper Company (“IPC”) filed an application for leave to file under seal a settlement agreement between Plaintiff and IPC’s co­defendants and portions of IPC’s motion to dismiss that quoted the settlement agreement.

To analyze whether the settlement agreement and the quoted portions should be filed under seal, the district court noted that: “The public has a general right to inspect and copy judicial documents so that it can monitor how public agencies work.” See Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178 (9th Cir. 2006) (citing Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n.7, 598 (1978)).

The district court explained that “[t]here is a strong presumption of public access to documents falling outside a narrow class of documents—such as grand jury transcripts and warrant materials in pending pre-indictment investigations—that have ‘traditionally been kept secret for important policy reasons.’ See id. To overcome the strong presumption of public access to judicial documents, a party seeking to seal such documents in dispositive motions must ‘articulate[] compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process.’ Id. at 1178-79 (internal citations and quotation marks omitted). For non-dispositive motions, the party must provide good cause to seal. See Ctr. For Auto Safety v. Chrysler Grp., LLC, 809 F.3d 1092, 1096 (9th Cir. 2016). “Good cause is established on a showing that disclosure will work a clearly defined and serious injury to the party seeking closure. The injury must be shown with specificity.” Pansy v. Borough of Stroudsburg, 23 F.3d 772, 786 (3d Cir. 1994) (quoting Publicker Indus., Inc. v. Cohen, 733 F.2d 1059, 1071 (3d Cir. 1984)). Continue reading

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In this patent infringement action, plaintiff Performance Chemical Company (“PCC”) filed a motion for sanctions based on defendant, True Chemical Solutions (“True Chem”) concealing of evidence until a few weeks before trial.

In analyzing the motion, the district court noted that the allegations of misconduct were largely undisputed:

What distinguishes this case from the more “routine” situation where the Court has to determine whether the allegations of misconduct are true, is that PCC’s contentions of True Chem’s misdeeds are largely undisputed. It is really not in serious dispute that (a) True Chem hid material evidence, (b) True Chem disregarded and disobeyed not just normal discovery practices but a specific mandate from the Court to provide a complete frac trailer for inspection, (c) True Chem failed to preserve evidence and may have destroyed evidence by dismantling a trailer for the specific purpose of hiding evidence of automation, (d) True Chem filed a declaratory judgment action alleging non-infringement without sufficiently reviewing its own documents and emails, and (e) True Chem’s employees — no other phrase encapsulates it — lied under oath when asked direct questions about automation. The Court is therefore forced to conclude that True Chem acted deliberately and in bad faith.

Based on these allegations, the district court was left with the question of what sanction to impose. PCC sought the death penalty sanction. Continue reading