Articles Posted in D. Delaware

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In a recent discovery dispute in a patent infringement case, the district court denied the defendant’s motion to compel the plaintiff to produce certain inventor emails that were withheld on the basis of the work product doctrine. The key issue was whether the plaintiff demonstrated that the emails, exchanged between the two inventors of the asserted patents from 2016-2018, were prepared in anticipation of litigation. The litigation ultimately commenced in February 2022.

The district court acknowledged that evidence pointed to by both sides benefitted their respective positions–the defendant highlighted facts suggesting the inventors’ work was not in anticipation of litigation, while the plaintiff provided contrary evidence. Ultimately, the district court found the plaintiff’s showing sufficient to meet its burden and justify the work product protection.

Key evidence cited by the district court included:

  1. An inventor’s testimony that he began investigating potential infringement in November 2015 with the assistance of outside counsel.
  2. The inventor provided information to outside counsel from 2016-2020 to assess possible infringement.
  3. Starting November 2015, the inventor implemented measures to preserve documents related to the patents and defendant.
  4. Testimony from the outside attorney that he had previously advised the plaintiff about potential litigation involving the patents at issue.

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In the ongoing patent infringement case between Acceleration Bay LLC and Activision Blizzard Inc., the district court recently issued an order resolving several important evidentiary disputes between the parties. This order provides guidance on the admissibility of various categories of evidence that will impact the damages case at the upcoming trial.

Here are the key takeaways:

Survey Evidence Allowed for Limited Purpose

The court permitted Acceleration Bay to use Activision’s own customer surveys for the limited purpose of showing that the allegedly infringing large multiplayer game modes in Call of Duty are of equal or greater importance to customers compared to the non-infringing small game modes. Nonetheless, the district court reiterated its exclusion of the plaintiff’s damages expert’s opinions apportioning royalties based primarily on this survey evidence, finding that while the surveys can demonstrate the significance of the accused modes, they cannot directly calculate the royalty damage amount.

Evidence of Foreign World of Warcraft Sales Permitted

The district court allowed Acceleration Bay to present evidence of Activision’s foreign sales revenues for the World of Warcraft game. The plaintiff’s theory is that the infringing U.S.-based server system supports foreign players in North and South America. The district court found that as long as Acceleration Bay provides evidence linking the foreign sales to the accused domestic server system, the foreign revenue numbers can be admitted, even if conditionally at first. Continue reading

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In the ongoing case of Inmar Brand Solutions, Inc. v. Quotient Technology Inc., the district court was tasked with conducting an analysis under the Supreme Court’s two-step test in Alice Corp. v. CLS Bank International to determine whether Inmar’s patented coupon-processing system, exclusively licensed from Intelligent Clearing Network, Inc. (ICN), was entitled to patent protection. Under the Alice framework, the district court must first ascertain whether claims are directed towards patent-ineligible subject matter, such as abstract ideas. If so, the district court proceeds to the second step, wherein it evaluates whether the claims contain an inventive concept that transforms the abstract idea into a patent-eligible application.

Quotient contends that the patents asserted by Inmar are invalid and directed towards a patent-ineligible abstract idea: namely the processing of coupons on a remote server. According to Quotient, the claims lack an inventive concept and merely recite generic computer components.

Inmar opposes this characterization, and contends that the claims represent an improved coupon processing architecture that significantly reduces fraud and cannot be accomplished by humans.

As explained by the district court, the primary concern underlying this argument is the concept of preemption, which aims to prevent the granting of a monopoly over an abstract idea that could impede innovation. While the Supreme Court in Alice did not provide precise contours for what constitutes an abstract idea, subsequent Federal Circuit decisions have shed light on this issue. Continue reading

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The crux of this case revolves around a dispute over patent infringement, trade secret misappropriation, and unfair competition filed by Nielsen (or Plaintiff) against Hyphametrics (or Defendant). At the heart of the issue in this motion were specific documents – experimental reports. These reports were initially produced by Hyphametrics to Nielsen but were later retracted under the assertion of work product protection.

The Memorandum Order issued by the court dissected the arguments presented by both parties and presented the court’s rationale for its ruling on Nielsen’s motion to compel Hyphametrics to produce the disputed documents. The court began by addressing Hyphametrics’ intentional production of certain reports to Nielsen. Despite Hyphametrics’ claim that the documents were mistakenly believed to be unprotected by the work product doctrine, the court noted that the intentional release of these documents nullified any work product protection. The court emphasized that the mistaken belief in their protection status cannot serve as a valid basis for claiming inadvertent production.

The court explained that Defendant’s prior counsel (“prior counsel”) produced three reports at issue here to Plaintiff. “When prior counsel did so, it knew all of the facts one would need to know to understand that, under the law, those documents were protected by the work product doctrine. A document is protected by the work product doctrine if it is prepared in anticipation of litigation or trial by a party or its representative. Fed. R. Civ. P. 26(b)(3)(A). It is undisputed here that the reports fit this bill, and prior counsel knew this when they intentionally produced the reports.” As a result, the court concluded that Defendant therefore waived any work product protection for the reports by intentionally producing them here. Continue reading

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In the case of Speyside Medical, LLC v. Medtronic CoreValve LLC et al, the district court recently granted the defendants’ motion to compel the plaintiff, Speyside Medical, to produce information regarding its members and litigation funder. The district court found such information relevant, emphasizing the importance of understanding the precise financial stake held by the plaintiff’s members in the outcome of the lawsuit.

Speyside Medical, LLC filed a lawsuit against Medtronic CoreValve LLC and other defendants. As the litigation unfolded, the defendants sought to compel Speyside Medical to disclose information about its members and its litigation funder. They argued that this information was crucial to understanding potential biases that may arise from financial interests in the case outcome.

In granting the defendants’ motion to compel disclosure, the district court stated, “Surely whether Plaintiff’s members have a financial interest in the outcome of this lawsuit is, as Defendants suggest, relevant to bias for purposes of future cross-examination of the members.” The district court emphasized the significance of understanding the precise financial stake held by the plaintiff’s members, considering the complexity of the financial arrangements involved. Continue reading

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In this patent infringement action, the district court analyzed whether a litigation funding agreement should be produced. After it reviewed the litigation funding agreement that the plaintiff had entered into with a litigation funder, the district court concluded that the funding agreement itself was not relevant to issues of standing.

The district court explained that the funding agreement appeared to provide a security interest in four of the patents-in-suit to a third party, but noted that they had not been exercised and likely would not be exercised, if ever, for a long time. On that basis, the district court concluded that the litigation funding agreement and the related communications would not be relevant to standing.

In reviewing the funding agreement, however, the district court found that a portion of the agreement did not concern funding the litigation but instead detailed how the third-party fund would provide the plaintiff with money that the plaintiff could then use to purchase the four patents-in-suit. The district court concluded “[t]hat portion of the agreement, and any communications relating to it, would appear to be relevant to damages in this case (such that were that content not privileged or work product protected, it should be produced). See, e.g., Integra Lifesciences I, Ltd. v. Merck KGaA, 331 F.3d 860, 871 (Fed. Cir. 2003); Finjan, LLC v. ESET, LLC, Case No.: 17-cv-183-CAB-BGS, 2021 WL 1541651, at *6 (S.D. Cal. Apr. 20, 2021); TC Tech. LLC v. Sprint Corp., No. 16-cv-153-RGA, 2019 WL 2515779, at *10 (D. Del. June 18, 2019); Uniloc USA, Inc. v. Apple Inc., Case No. 19-cv-01692-EJD (VKD), 2020 WL 4368207, at *2 (N.D. Cal. July 30, 2020) (citing cases).”

Speyside Medical, LLC v. Medtronic CoreValve LLC et al, Case No. 1-20-cv-00361 (D. Del. April 28, 2021)

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As the district court, explained the “case present[ed] the Court with a disturbing and unfortunate situation. Puneet Chawla, Defendant Workspot, Inc.’s (“Workspot”) co-founder, former Chief Technology Officer (“CTO”), and former member of the Board of Directors, sent harassing and threatening email messages to executives of Plaintiff Citrix Systems Inc. (“Citrix”), and posted additional messages to intend sites. In connection with opposing Citrix’s motion for a preliminary injunction and temporary restraining order (“PI Motion”), Workspot then filed a declaration from Mr. Chawla, which contained knowingly false statements, including denials of Chawla’s harassing conduct. At a December 2018 hearing denying Citrix’s PI Motion, the Court imposed monetary sanctions on Workspot, which ultimately totaled $271,963. The Court also ordered limited, expedited discovery relating to the sanctionable conduct and authorized Citrix to move for additional sanctions after the completion of that discovery.”

Citrix then moved for additional sanctions, including additional monetary sanctions, jury instructions and the striking of Workspot’s equitable defenses. Although the district court denied the additional monetary sanctions and jury instructions, the district court did strike Workspot’s equitable defenses. Continue reading

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In this patent infringement action, Microchip accused Aptiv’s Dual Role Hub of infringing several the patents. As the district court explained, the Dual Role Hub is a media module that Aptiv manufactures and sells to automakers for incorporation into a car’s infotainment system through USB peripherals, such as a smart phone. The Dual Role Hub can also perform a more complex function. For example, when an iPhone is connected to the Dual Role Hub to start an Apple CarPlay session, the Hub detects the iPhone and requests that it re-connect as a host device instead of a peripheral device and when that happens, two hosts–the Head Unit and the iPhone—can connect to the same Dual Role Hub, which permits the user to make use of other hub ports while CarPlay is active.

Microchip served an expert report from Stephen Becker, Ph.D., which offered two damages-related opinions. First, he explained that, if Aptiv had not infringed, Microchip would have earned incremental profits of $40.9 million. Second, he determined that Aptiv and Microchip would have agreed to a reasonable royalty of $2 per Dual Role Hub in a hypothetical negotiation. Continue reading

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In this patent infringement action, AT&T filed a motion to compel certain litigation-funding discovery from the plaintiff, United Access Technologies, LLC (“UAT”).  The district court reviewed documents relating to or from third parties regarding potential investments by those third parties in UAT’s lawsuits and communications to and from third parties relating to “quarterly updates” about UAT’s current lawsuits.  In its motion, AT&T contended the information was not privileged and should be produced.  UAT responded that the litigation funding was irrelevant and was protected by the work-product doctrine.

To analyze the issue, the district court explained that “[d]iscoverability of litigation funding materials under Federal Rule of Civil Procedure 26 is a contested issue on which there is no binding precedent in the Third Circuit. See In re Valsartan N-Nitrosodimethylamine (NDMA) Contam. Prod. Liab. Lit., 405 F. Supp. 3d 612, 615 (D.N.J. 2019) (collecting cases and agreeing “with the plethora of authority that holds that discovery directed to a plaintiff’s litigation funding is irrelevant”). Generally, when confronted with this sort of dispute, close consideration of the subject matter in the disputed documents (e.g., through in camera review) is a prudent approach. See, e.g., ART+COM Innovationpool GmbH v. Google, Inc., C.A. 14-217 D.I. 196 (D. Del. Sept. 11, 2015) (finding, after in camera review, agreements with plaintiff’s litigation financiers were irrelevant).” Continue reading

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In this patent infringement action between Guardant and Foundation Medicine (“Foundation”), Foundation moved to exclude the testimony of Guardant’s damage expert, Dr. Becker, on reasonable royalty damages.  In his opinion, Dr. Becker applied on an apportionment factor of 50% in that he asserted the patents contributed at least 50% of the value of the Foundation accused products.  To support this opinion, Dr. Becker relied on a discussion with Dr. Cooper, Guardant’s infringement expert.

Foundation argued that the portions of Dr. Becker’s and Dr. Cooper’s testimony regarding reasonable royalty damages should be excluded because they failed to properly apportion damages to only the patented features of the accused products.  The district court explained that “the central dispute here is whether the 50% apportionment value chosen by Dr. Becker (Guardant’s damages expert) is sufficiently supported by the content of his discussion with Dr. Cooper (Guardant’s infringement expert)—a discussion that provided the exclusive basis for Dr. Becker’s apportionment figure.”  Foundation argued that there was no proper support as Dr. Cooper’s opinions regarding the 50% apportionment value are without “explanation or methodology[.]” Continue reading