Articles Posted in District Courts

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In this long running patent dispute, the district court denied Apple’s motion to amend the judgment based on a five month delay. The district court explained the long running history of the case as follows: “Nearly 10 years ago, VirnetX sued Apple, alleging Apple’s FaceTime and VPN on Demand features infringed VirnetX’s patents. Four trials, three appeals and a litany of parallel proceedings ensued. Almost three years ago, this Court laid to rest a portion of the parties’ quarrel, entering final judgment in the above-captioned matter. Now, under Rule 60, Apple attempts to resurrect this case for a retrial on damages.”

In its motion to set aside the final judgment under Rule 60(b)(6), Apple argued that the relief was necessary to prevent VirnetX from recovering “a massive damages judgment for patent claims that are necessarily unpatentable.” VirnetX responded that Apple’s motion was untimely, that it attempted to relitigate issues raised on direct review and failed to establish the “extraordinary circumstances” necessary for relief under Rule 60(b).

The district court agreed with VirnetX, noting that motions under Rule 60(b)(6) “must be made within a reasonable time.” FED. R. CIV. P. 60(c). “What constitutes [a] ‘reasonable time’ depends on the facts of each case, taking into consideration the interest in finality, the reason for delay, the practical ability of the litigant to learn earlier of the grounds relied upon, and prejudice to other parties.” Travelers Ins. Co. v. Liljeberg Enters., 38 F.3d 1404, 1410 (5th Cir. 1994) (quoting Ashford v. Steuart, 657 F.2d 1053, 1055 (9th Cir. 1981)). “A district court is provided wide discretion in determining whether a Rule 60(b) motion is filed within a reasonable time.” McKay v. Novartis Pharm. Corp., 751 F.3d 694, 701 n.5 (5th Cir. 2014). Continue reading

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In this patent infringement action, the plaintiff’s counsel deposed one of the defendant’s (DJO) Fed.R.Evid. 30(b)(6) witnesses during a deposition that took place remotely.  At the remote deposition, counsel questioned the witness regarding a license agreement and a privileged letter that was apparently appended to the license agreement.  Plaintiff then contended that any objections to the privileged nature of the letter were waived and that the waiver should be not just to the letter but also to the subject matter of the letter.

To analyze the waiver issue, the district court addressed whether DJO took appropriate steps to claw back the privileged letter.  DJO contended that it did promptly take reasonable steps to rectify the error, explaining that, because the deposition was remote and the letter was attached to many other non-privileged documents, DJO’s counsel could not tell from the remote display of the document whether the letter had been intentionally produced.  Although Mr. DJO’s counsel did not assert privilege over the letter during the deposition or after the letter was discussed, DJO identified the letter as inadvertently produced and requested the destruction of the letter and related testimony “within hours” of the deposition’s conclusion. 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, the plaintiffs sought to exclude the defendant’s expert on invalidity and infringement. One of the grounds on which they sought to exclude the testimony was based on bias. The plaintiffs contended that the expert’s bias stemmed from his belief that he invented certain of the technology at issue, which the plaintiffs disputed and which they asserted would motivate him to form opinions that are not based on facts.

In analyzing the issue, the district court noted that “[a]n expert’s alleged bias, however, is not a proper basis on which to exclude his or her testimony under Daubert or Rule 702. See Cage v. City of Chicago, 979 F. Supp. 2d 787, 827 (N.D. Ill. 2013) (collecting cases); Baldwin Graphic Sys., Inc. v. Siebert, Inc., No. 03 C 7713, 2005 WL 4034698, at *3 n.3 (N.D. Ill. Dec. 21, 2005) (“[A]lleged bias is fodder for cross-examination and impeachment, not a ground for exclusion [of expert testimony].”). Any bias on the part of a witness would go to the weight of a specific opinion, not to its admissibility. See Cage, 979 F. Supp. 2d at 827 (citing DiCarlo v. Keller Ladders, Inc., 211 F.3d 465, 468 (8th Cir. 2000)).

Accordingly, the district court denied the plaintiffs’ motion to exclude the expert’s testimony on invalidity and infringement.

Neurografix v. Brainlab, Inc., Case No. 12 C 6075 (E.D. Ill. July 6, 2020) Continue reading

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Raffel Systems, LLC (“Raffel”) filed a patent infringement action against Man Wah Holdings (“Man Wah”).  Man Wah moved to dismiss the patent claims on the ground that Raffel did not possess title to the patents at the time the lawsuit was filed and therefore lacked standing to sue.

As explained by the district court, Man Wah asserted that Raffel lost title to the patents when Raffel mortgaged its patents to obtain loans with PrivateBank and East West Bank. Man Wah relied on the U.S. Supreme Court case of Waterman v. Mackenzie, 138 U.S. 252 (1891) for its position that because Raffel granted PrivateBank and East West Bank security interests in its patents and the banks recorded their security interests with the USPTO, this transferred title in the patents from Raffel to the banks.

In opposition to the motion, Raffel argued that its agreements with the banks are nothing more than standard security agreements granting the banks a security interest in the patents, not a conveyance of title. 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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Following Straight Path IP Group’s, the patent owner’s, unsuccessful appeal, Apple and Cisco moved for reasonable attorney’s fees. Although the district court reaffirmed the exceptionality of the patent owner’s prosecution of the case, the district court found that defendants’ fee requests were too high and directed the parties to submit their billing requests to a special master. The order cautioned the defendants to “take care to submit only for time and expenses that truly deserve compensation and at billing rates that truly deserve to be compensated,” stating that the district court might treble the deductions for requests the special master found unreasonable.

After briefing and a hearing, the special master recommended that Apple should receive nearly all it requested, with some minor deductions taken for “certain ambiguous or duplicative time entries.” On the other hand, the Special Master recommended that Cisco should receive only half because its billing records never conformed to the district court’s direction. As part of the reasoning, the special master explained that Cisco did not pay counsel by the hour, rather it paid a flat-monthly fee. As explained by the district court, “[t]he special master found Cisco’s original billing submission deficient and asked Cisco to resubmit. Cisco did so, but the special master found the records remained deficient for an ordinary lodestar review. To be sure, the special master found this alternative billing method compensable under § 285, but the records did not paint a clear picture of counsel’s billable activities or clearly delineate between this case and other, non-compensable work for Cisco. Thus, the special master concluded a 50% reduction would ensure patent owner did not overpay, yet still compensate Cisco for fees actually paid. Finally, the special master declined to treble the deduction, finding Cisco’s noncompliance a product of the alternate billing arrangement and not of bad faith.”

The patent owner subsequently objected that the special master’s awards of fees was too high. 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

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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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District Court Determines No Personal Jurisdiction Exists Under Rules (4)(k)(1) and (4)(k)(2) of the Federal Rules of Civil Procedure Where Plaintiff Could Show Only a Single Infringing Unit Was Sold in the State and Defendant’s Website and Other Activities Were Not Directed at Residents of the State

by
Stan Gibson and Julia Consoli-Tiensvold

In Miller Industries Towing Equipment Inc., v. NRC Industries, Plaintiff Miller Industries Towing Equipment Inc. (“Plaintiff” or “Miller”) alleged infringement of a patent by NRC Industries (“Defendant” or “NRC”). The patents in question involve towing recovery vehicles designs and uses. Defendant moved to dismiss under Federal Rule of Civil Procedure (“FRCP”) 12(b)(2), alleging that the Court lacked personal jurisdiction over NRC. Defendant also moved to dismiss the claims under FRCP 12(b)(6), but this was ultimately determined to be moot in light of the Court’s determination.

Plaintiff argued that the district court could exercise personal jurisdiction over NRC as it has exercised sufficient “minimum contacts” with the state of Tennessee under Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), because NRC advertises in two magazines that have Tennessee subscribers, posts training videos to nationally accessible third-party websites (such as YouTube), maintains a website accessible by Tennessee residents, participates in trade shows where NRC markets its infringing products to Tennessee residents, and because NRC has sold the infringing product to at least one Tennessee resident.

The legal standard for determining whether a court may exercise personal jurisdiction over a defendant is based on FRCP 4(k)(1) and 4(k)(2). Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1410 (Fed. Cir. 2009). Continue reading