Articles Posted in C.D. California

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In a recent development in patent litigation, the district court has granted a motion to dismiss counterclaims in a case involving U.S. Patent No. 10,519,668 (“the ‘668 Patent”). The decision sheds light on the importance of adhering to meet and confer obligations, as well as the consequences of non-compliance.

Background:

The defendants in this case had asserted counterclaims, including declaratory judgments of invalidity and non-infringement of the ‘668 Patent, breach of contract, fraud, unjust enrichment, and constructive trust.  On October 31, 2023, the district court granted the defendants’ Motion for Summary Judgment of non-infringement of the ‘668 Patent, marking a significant milestone change in the proceedings.

Subsequent Events:

Following the district court’s decision, the defendants’ counsel sought to engage in a meet and confer with the plaintiff, Upstream, regarding the possible dismissal of the counterclaims without prejudice. Despite making multiple attempts to contact Upstream’s counsel between March 19 and 27th, no response was received. Consequently, the defendants proceeded to file a motion to dismiss their counterclaims on March 29, 2024. Continue reading

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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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Plaintiff ChromaDex, Inc. (“ChromaDex”) filed a motion for terminating sanctions against defendant Elysium Health, Inc. (“Elysium”) based on admissions that Elysium’s executives lied in their depositions regarding one of the executive’s cocaine use. The production of text messages ignited the issue.

Elysium had produced text messages from Elysium’s CEO’s phone showing that he—from September 29, 2015 through October 15, 2016—frequently purchased cocaine (referred to in the messages as “fire white,” “fire shit,” “white,” and “the special,” among other terms), including having it delivered to the Elysium office. The messages also showed that the CEO confided in January 2016 to a friend he met on a dating application that he had been “do[ing] too many drugs,” specifically “[c]oke,” and drinking a lot, for “maybe 6 months,” and how he wanted to stop but had not been able to stop. The text messages also suggest that others knew about the CEO’s drug use.

Elysium filed an ex parte application attempting to claw back the text messages, which the Magistrate Judge denied. Continue reading

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In this patent infringement action, the City of Hope filed a motion for summary judgment. The district court denied the motion without prejudice for failing to comply with the Local Rules meet and confer requirement.

Central District Local Rule 7-3 provides that “counsel contemplating the filing of any motion shall first contact opposing counsel to discuss thoroughly, preferably in person, the substance of the contemplated motion and any potential resolution” at least seven days before filing a motion. C.D. Cal. L.R. 7-3. “The purpose of Local Rule 7-3 is to help parties reach a resolution which eliminates the necessity for a hearing,” which “further[s] judicial economy and the administration of justice.” James R. Glidewell Dental Ceramics, Inc. v. Phila. Indem. Ins. Co., No. 8:16-cv-01155-JLS-E, 2016 U.S. Dist. LEXIS 189416, at *1 (C.D. Cal. Sept. 12, 2016) (internal quotation marks omitted); accord Caldera v. J.M. Smucker Co., No. CV 12-4936-GHK (VBKx), 2013 U.S. Dist. LEXIS 183977, at *2 (C.D. Cal. June 3, 2013) (noting that the rule “enables the parties to brief the remaining disputes in a thoughtful, concise, and useful manner” (internal quotation marks omitted)).

The district court explained that the City of Hope did “not present a statement of compliance with the prefiling conference requirement, as required by the Local Rule. Although the record shows that the parties long have contemplated filing motions for summary judgment, the motion itself is devoid of any information showing that counsel discussed the issues in the motion thoroughly such that the briefing will be “directed to those substantive issues requiring resolution by the Court.” (Initial Standing Order § 9(c).)” Continue reading

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Plaintiff DivX, LLC (“DivX”) filed patent infringement actions against Netflix and Hulu asserting that both companies infringed various patents. Both defendants filed motion to stay their cases pending inter partes review (“IPR”) proceedings before the Patent Trial and Appeal Board (“PTAB”).

As explained by the district court, starting in October 2019, Defendants began filing IPRs of certain claims of the asserted patents before the PTAB. Defendants filed the majority of their IPR petitions between February and March 2020. The deadline for Defendants to file their IPR petitions passed in mid-March 2020, before Plaintiff’s deadline to reduce the number of asserted claims in this case.

After the filing of all of the IPRs, but before the PTAB had decided whether or not to issue review, the Defendants moved to stay the proceedings. Continue reading

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In this patent infringement action, Plaintiffs Brian Horowitz and Creative Outdoor Distributors USA Inc. (the “Plaintiffs”) filed a motion for sanctions against Defendant Yishun Chen (“Yishun”) and his counsel, David Lin (“Lin”) for alleged misconduct that took place during the depositions of defendants. The court had previously granted a motion to compel a further deposition, noting “that Lin and Yishun left the room while questions were pending, Lin improperly instructed Yishun not to answer questions, Lin made frequent speaking objections to coach Yishun, and that Lin was disrespectful and personally attacked opposing counsel.”

The court ordered the video transcripts filed so that it could review the depositions for itself. After reviewing the transcripts, the court determined that there were several instances of inappropriate behavior by the Defendants and their counsel. For example, the court explained that:

The court also found that an off-the-record conference between the attorney and Yishun was also troubling. The Court explained as follows: “Gibby asked Yishun when he gave Defendant Kevin Xia the right to protect his patents, to which Yishun replied, “2016, the end of the year, or perhaps it was at the beginning of 2015 when I first started working with him.” Gibby asked, “So, either the end of 2015 or the beginning of 2016,” prompting Lin to object, “I don’t think that’s what he said. I think he said the end of the year, 2016,” and Yishun to answer, “That’s what I remember.” Gibby then asked, “When you gave Kevin the right to protect your patents at the end of 2015 or the beginning of 2016, did you put the right for him to do that in writing at that time?” Lin objected, “I think that misstates his prior testimony. His prior testimony, I believe he said,” causing Gibby to protest that Lin was coaching. Continue reading

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The plaintiff Alexsam, Inc. (“Alexsam”) filed an ex parte application to compel compliance with a subpoena to produce documents against a third party to the action, MasterCard. Alexsam had first served a Rule 45 subpoena on MasterCard several months earlier but had not received the documents it requested. Alexsam contended that it was being “stonewalled by delays in responding [by MasterCard] and then a last-minute demand that is unreasonable” after the close of fact discovery. As a result, Alexsam sought ex parte relief, arguing that it has acted diligently, but that MasterCard, while at first appearing cooperative, then refused to comply.

The district court began its analysis of the ex parte application by noting that ex parte applications are solely for extraordinary relief and should be used with discretion. See Local Rule 37-3 (to be heard on an ex parte basis, the moving party must show “irreparable injury or prejudice not attributable to the lack of diligence of the moving party”).

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Plaintiff Genes Industry, Inc. (“Genes”) filed a patent infringement action against Defendant Custom Blinds and Components, Inc. (“Custom”). The patent discloses a winding wheel for use on window coverings. Custom filed a motion to continue its expert report deadlines from November 28, 2016 to February 10, 2017, and to continue the expert discovery cut-off date from December 16, 2016 to May 17, 2017.

In reviewing the request, the district court noted that “Defendant retained a new counsel way back in early November and the Court ordered the attorney substitution on November 17, 2016. This was 11 days before Defendant’s expert reports were due. Defendant’s counsel states that it took significant time to review the case after receiving the file on November 19, 2016. For some reason, Defendant’s counsel waited until just two days before Defendant’s expert reports were due before attempting to enter a stipulation with Plaintiff’s counsel to extend expert report deadlines. Plaintiff’s counsel declined this attempt because the Court’s previous order granting an extension of expert report deadlines had stated in capital letters that ‘no further continuances [would] be granted without a further very strong showing of good cause.'”
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Plaintiff Ecojet, Inc. (“Ecojet”) brought a patent infringement action against Defendant Luraco, Inc. (“Luraco”) for infringement of U.S. Patent No. RE45,844 (“the ‘844 Patent”). After the litigation was pending for several months, Luraco filed a Motion for Leave to File a First Amended Answer regarding venue.

In its motion, Luraco asserted that even though it “originally admitted that venue is proper in this district, it has since determined that venue is improper.” The district court explained that “Luraco’s argument seems to be tied to its request for re-examination of the ‘844 Patent, but the actual basis for venue being improper is unclear from its Motion.”
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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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