Articles Posted in District Courts

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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

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In this patent infringement action, the Regents of the University of California (“the Regents”) alleged that defendant LTI Flexible Products, Inc., d/b/a Boyd Corporation (“Boyd”) improperly claimed ownership of a patent that the Regents owned and manufactured and sold technology that infringed the patent. Boyd moved to dismiss the complaint on a number of grounds, including that the Regents did not have standing to pursue the action.

The Regents contended that they owned the patent-in-suit because the inventors rights in it “were automatically assigned” to the Regents by operation of the Patent Acknowledgments. The district court explained that “[w]hether a patent assignment agreement automatically assigns or is only a promise to assign is a question of federal law. DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed. Cir. 2008). When the agreement’s plain language is clear, that ends the inquiry. See id. Automatic assignments can occur only when the language so indicates, such as language declaring that the patent ‘shall belong to’ a party or that the assignor ‘hereby assigns’ the rights. See, e.g., Speedplay, 211 F.3d at 1253. In contrast, language that obligates an owner ‘to assign’ or says the patent ‘will be assigned’ is only an agreement to assign. See, e.g., Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1581 (Fed. Cir. 1991). Continue reading

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In this patent dispute, Apple sought an order requiring that 11 depositions of Apple employees, noticed by Plaintiffs Masimo Corporation and Cercacor Laboratories, Inc. (“Plaintiffs”) for May and June 2021 to proceed in-person, in San Francisco, California, instead take place remotely by videoconference under Rule 30(b)(4) of the Federal Rules of Civil Procedure due to the continuing COVID-19 pandemic.

Although Apple did not provide declarations from the deponents or evidence upon which to conclude that the deponents themselves had concerns about appearing in-person for depositions or were only required to work remotely for the foreseeable future, due to the seriousness of the issues raised, the district court did not deny the request outright but instead provided Apple with an opportunity to make an appropriate showing.  As part of this showing, the district court required Apple’s counsel to submit a declaration that “identifies by name each of the 11 Apple employee-deponents who are the subject of the Application, and, for each deponent, attests that counsel has either spoken with or received an electronic communication directly from each such deponent, and answers, for each such deponent based on such communication: (a) whether the deponent states the deponent uncomfortable proceeding with an in-person deposition due to COVID-19; (b) whether the deponent has, for the preceding 30 days, worked for Apple remotely-only; (c) whether the deponent has attended any in-person work-related meeting during the preceding 30 days; and (d) whether the deponent has been advised that Apple requires the deponent to work remotely for the next 60 days. Confirmation of items (b), (c), and (d) are included based on the arguments and assertions made by Apple in the Application.” 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 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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The district court previously granted summary judgment in favor of the plaintiff, Red Carpet Studio (“Red Carpet”), finding that Defendants Midwest Trading Group Inc. (“MTG”), Walgreen Company and CVS Pharmacy Inc. infringed the patent-in-suit. The parties agreed that two issues remained: (1) determining the relevant “article of manufacture,” and (2) calculating the “total profit” on that article of manufacture. Red Carpet argued that the district court should decide the second issue without a jury because it seeks disgorgement of profits, which Red Carpet maintained is an equitable remedy with no right to a jury trial.

As the district court explained, determining a damages award under 35 U.S.C. § 289 “involves two steps. First, identify the ‘article of manufacture’ to which the infringed design has been applied. Second, calculate the infringer’s total profit made on that article of manufacture.” Samsung Elecs. Co. v. Apple Inc., 137 S.Ct. 429, 434, 196 L.Ed. 2d 363 (2016). The district court acknowledged that “neither the Court nor the parties were able to find authority which directly resolves the question of whether a jury or a judge must make this determination,” but concluded that “there [is] sample support for the conclusion that a claim for damages under § 289 is one for equitable relief.” Continue reading

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Plaintiff Global Tubing, LLC (“Global”) filed a motion to compel production of documents withheld as privileged by Defendant Tenaris Coiled Tubes, LLC (“Tenaris”). As explained by the district court, in its motion to compel, Global claimed that Tenaris obtained its patents by deceiving the Patent and Trademark Office (“PTO”), withholding prior art in prosecuting the main patent, and then altering and withholding a key piece of the prior art. Global contended that Tenaris’ actions withholding the material from the PTO amounted to fraud, vitiating any attorney-client privilege under the crime-fraud exception. Global sought to compel documents withheld as privilege that were in the possession of the prosecution counsel relating to the prior art materials and those relating to inventorship of the three patents at issue. Global also sought to compel production of an affidavit submitted in support of the patent that Tenaris clawed back asserting that the privilege, if any, was waived and the affidavit contained direct evidence of Tenaris’ fraud on the PTO, vitiating any privilege under the crime-fraud exception to the attorney-client privilege.

In support of the motion to compel the affidavit, Global presented evidence of Tenaris’ knowledge of the prior art materials, the inventors’ review and discussion of those materials and the overlapping specifications with the patent-in-suit. As explained further by the district court, Global also showed that Tenaris tendered the materials to prosecuting counsel, and counsel reorganized the material, removing the title page, divider pages, and entire specifications section, which purportedly contained information on overlapping chemistries, particularly significant in light of the PTO’s previous rejection of the patent based on obviousness that included overlapping chemistries. Continue reading

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In this patent infringement action, the plaintiff, Payrange, sought to withhold as privileged a PowerPoint presentation (the “Proposal”) prepared by its current litigation counsel, Wilson Sonsini. Prior to representing Payrange, but in the hope that it would be retained, Wilson Sonsini prepared the presentation and then forwarded it to Payrange. Payrange asserted that the Proposal was a privileged communication protected by both the attorney-client and work-product privileges, that it was inadvertently produced, and that it was clawed back promptly when Defendants raised their intention to rely on the presentation in a filing.

As explained by the district court, the Proposal primarily contains background regarding Wilson Sonsini’s litigation experience, its experience in the intellectual property and patent space, information regarding attorney experience, and a proposed fee arrangement. Additionally, the Proposal contains a comparison of possible venue districts for this litigation. On the executive summary page, the Proposal recommends a preference for one of those venues, and, finally, also on the executive summary page, the Proposal offers a suggestion that Payrange discourage other companies from working with the Defendants. Continue reading

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In this patent infringement action, the plaintiff, Personalized Media Communications, LLC (“PMC”), moved to exclude the testimony of Apple’s damages expert, Mr. Thomas. In rebuttal, Mr. Thomas estimated that PMC would be entitled to a lump-sum payment of $1 million per allegedly infringing patent.

PMC asserted that Mr. Thomas’ damages calculation was improper because his calculation of the value added by the patents-in-suit to the functionality of Apple’s FairPlay was flawed. As explained by the district court, PMC pointed to Mr. Thomas’ calculation when he “divided the profitability of FairPlay by 53 (50 Apple DRM patents plus the three patents-in-suit).” They state Mr. Thomas’ calculation “necessarily assumes that each of Apple’s patents has in fact contributed separate and non­cumulative benefit[s] to FairPlay.” PMC further states “[t]he Thomas Report contains no analysis of whether each (or even any) of Apple’s DRM patents were in fact used by Apple in its FairPlay technology at the time the patents-in-suit were issued, the priority date of the Apple patents, or whether the Apple patents are valid.” Continue reading

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Plaintiff All Plastic contended it was a leading manufacturer of premium displays and containers for medicinal and recreational cannabis dispensaries. All Plastic filed a patent infringement action against Defendants SamDan LLC d/b/a Smokus Focus (“SamDan”), Samuel Whetsel (“Mr. Whetsel”), and Daniel Russell-Einhorn (“Mr. Russell-Einhorn”) (with Mr. Whetsel, “Individual Defendants” and collectively, “Defendants”) alleging that Defendants make, use, and sell containers for personal cannabis use, that infringe upon the patent-in-suit.

All Plastic filed a motion to compel seeking an order compelling Defendants to produce various documents, re-designate materials already produced and designated “Confidential-Attorneys’ Eyes Only,” and remove redactions applied to materials produced on Defendants’ asserted basis of “relevance.” All Plastic made three arguments to support its contention that “[m]ost of the materials designated by Defendants do not qualify as AEO,”: (1) materials designated as AEO by Defendants are not highly sensitive in nature so as to qualify as trade secrets; (2) the maintenance of Defendants’ unwarranted AEO designations will prejudice All Plastic’s ability to litigate this case because Plaintiff’s counsel can share with their client almost “no material fact” learned from Defendants in this action; and (3) Plaintiff should not bear the expense of objecting to every single one of Defendants’ designations to ensure Defendants’ compliance with their duty to review documents in good faith before designating them as AEO, as per the Protective Order. Continue reading