Articles Posted in District Courts

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The defendants in this patent infringement action filed several motions for leave to amend their answers to include various affirmative defenses, including: (1) the affirmative defense of patent misuse; (2) the affirmative defense of inequitable conduct; (3) a counterclaim for declaratory judgment of non-infringement; and (4) a counterclaim for declaratory judgment of invalidity. Plaintiff REC Software (“REC”) opposed the motions for leave to amend and asserted that the proposed amendments would be futile and the proposed counterclaims and affirmative defenses were duplicative.

REC argued that there was no basis for a defense or counterclaim of patent misuse because an affirmative defense or counterclaim of patent misuse may not be based on infringement or damages positions asserted in litigation. As the district court explained: patent misuse usually applies where a patentee seeks to impermissibly extend the monopoly grant of a patent. U.S. Philips Corp. v. Int‟l Trade Comm‟n, 424 F.3d 1179, 1184-85 (Fed. Cir. 2005). The Federal Circuit has held that certain activities constitute per se patent misuse, such as when a patentee attempts to extend the term of the patent by contractually requiring payment of post-expiration royalties. Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869 (Fed. Cir. 1997). But other activities have been excluded from the doctrine of patent misuse. For example, Congress has declared that a patent owner may seek “to enforce his patent rights against infringement or contributory infringement” without being guilty of patent misuse or illegal extension of the patent right. 35 U.S.C. §271(d)(3).
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Rec Software USA, Inc. (“Rec”) filed a patent infringement action against HTC America, Inc. (“HTC”). HTC requested leave to file a motion for summary judgment based on 35 U.S.C. §101. The request for leave to file the summary judgment motion occurred prior to claim construction proceedings.

HTC argued that the summary judgment motion could potentially dispose of the entire case in support of its request for leave to file an early motion for summary judgment. Rec opposed HTC’s request by arguing that claim construction was necessary to understand the nature of the asserted claims.
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Plaintiff Labyrinth Optical Technologies LLC (“Labyrinth”) filed a patent infringement action against Defendant Alcatel-Lucent USA, Inc. (“Lucent”), alleging that Lucent infringes U.S. Patent No. 8,103,173 (the “‘173 Patent”). On the eve of trial, Lucent filed a motion to dismiss the case for lack of standing, arguing that Labyrinth could not show that it holds the rights to the ‘173 Patent.

The district court review the following facts to analyze the motion: “In November 2011, Teradvance Communications, LLC (“Teradvance”) granted to Acacia Research Group LLC (“Acacia”) an exclusive licence to certain patents and patent applications listed in an attached exhibit (“Exclusive License”). The list included foreign and domestic patents and pending patent applications, including U.S. Patent Application No. 12/554,241, which later issued as the ‘173 Patent. In April 2012, Acacia entered into an Assignment and Assumption Agreement (“Assignment”) with Labyrinth, one of Acacia’s affiliates. By its express terms, the Assignment is governed by Texas law. The Assignment notes that the Exclusive License covered “the Patents listed in the Exhibit attached hereto (the ‘Patents’),” but the Assignment does not specify whether the Exclusive License covered anything else. The Assignment states that it conveyed rights to the “Patents.” But unlike the Exclusive License, which actually has an exhibit identifying the patents subject to the agreement, the Assignment does not.”
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Defendant Ericsson filed an unopposed motion for leave to file its motion to strike certain paragraphs of a supplemental expert report for the plaintiff under seal. Although the request was unopposed, the district court evaluated whether it was appropriate to seal the motion and accompanying exhibits. In the motion, Ericsson argued that the motion to strike refers to, quotes from, and attaches exhibits which are designated, contain, and constitute protected material under the Protective Order.
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Continental Automotive GmbH and Continental Automotive Systems, Inc. (collectively “Continental”) filed a multi-claim lawsuit against iBiquity Digital Corporation (“iBiquity”), which asserted causes of action for patent exhaustion (Count I), patent misuse (Count II), declaratory judgment of patent rights (Count III), as well as several state law claims. iBiquity moved to dismiss Counts I, II, and III, arguing that patent exhaustion (Count I) and patent misuse (Count II) do not arise under federal patent law because they are not proper independent claims but, rather, are defenses to an anticipated patent infringement suit. iBiquity also contended that Continental’s claim seeking a declaratory judgment of patent rights (Count III) does not arise under federal patent law because it is merely a state law breach of contract claim in disguise, seeking to interpret a license agreement.

The district court began its analysis with the patent exhaustion and patent misuse claims. “iBiquity argues that the claims are merely defenses and not affirmative causes of action and, as such, they do not ‘arise under’ federal patent law. Def.’s Mem. Supp. Mot. Dismiss 6-8. Continental responds that this argument is irrelevant ‘[b]ecause subject matter jurisdiction in a declaratory judgment action is based on the claims that could be brought by the declaratory judgment defendant, rather than the declaratory judgment plaintiff.’ Pl.’s Resp. Mot. Dismiss 5. Moreover, Continental asserts that patent misuse may be asserted as an affirmative claim. Id.”
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Plaintiff Ecolab Inc. (“Ecolab”) filed a patent infringement action alleging that Gurtler infringed Ecolab’s patent for “SANITIZING LAUNDRY SOUR,” United States Patent No. 6,262,013 (the “‘013 Patent”). Gurtler subsequently filed a Request for Ex Parte Reexamination of the ‘013 Patent. Gurtler then filed a motion to stay and the United States Patent and Trademark Office (“PTO”) granted Gurtler’s Request for Ex Parte Reexamination of all claims of the ‘013 Patent.

In support of its motion to stay and lack of prejudice to Gurtler, Gurtler argued that Ecolab tactically delayed serving its complaint for four months, which demonstrates that “time is not of the essence” to Ecolab. Additionally, Gurtler argued that because the case was in the early stages of discovery, there was no prejudice to Ecolab. Ecolab argued it will be unduly prejudiced because it is one of Gurtler’s direct competitors, its ability to litigate its claims will suffer, and because Gurtler delayed in seeking reexamination.
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Plaintiff NOV filed a patent infringement action asserting that defendant Omron had infringed NOV’s patent (U.S. Patent No. 5,474,142 or the ‘142 Patent). Specifically, NOV alleged Omron’s oil rig automation control system has an automatic driller function that infringes one or more claims of the ‘142 Patent.

After years of litigation, Omron filed dispositive motions asserting lack of standing, no infringement and invalidity of the ‘142 Patent. The district court first found that NOV had no standing to assert the patent as the owner of the patent had only “agreed to assign” the patent. “In sum, the prevailing Federal Circuit case law makes clear the “agrees to assign” language in the ACA was not a present assignment. The ACA further indicates Varco, L.P. was to issue a separate assignment document, but there is no such piece of paper. Because NOV is unable to show the ACA was a present assignment of assets, the Court finds, on this ground alone, NOV has failed to satisfy its burden of proving ownership and, consequently, standing to sue.”
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In MLC Intellectual Property, LLC v. Micron Technology, Inc., Case No. 14-cv-3657 (N.D. Cal.), MLC filed its lawsuit on August 12, 2014, accusing Micron of infringing U.S. Patent No. 5,764,571 (“the ‘571 patent”). On October 15, 2014, Micron answered the complaint and asserted counterclaims for declaratory judgment of non-infringement and invalidity of the ‘571 patent. At the initial case management conference on November 21, 2014, the Court set a further case management conference for March 20, 2015, the tutorial hearing for June 10, 2015, and the claim construction hearing for June 17, 2015.

On December 24, 2014, Micron filed a petition for inter partes review (“IPR”) at the U.S. Patent and Trademark Office (“PTO”), challenging the patentability of at least each asserted claim of the ‘571 patent. The PTO accorded the IPR petition a filing date of December 24, 2014, and thus the PTO must issue a decision on whether to institute the IPR no later than June 24, 2015. On December 29, 2014, Micron filed its motion to stay pending the IPR. In its motion, Micron sought a stay through a final written decision of the IPR including any appeals to the Federal Circuit. MCL partially opposed only the portion of the stay beyond the final written decision of the PTO rather than after all appeals have been exhausted. MCL also argued that the case should not be stayed at this time until after the claim construction was completed.
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In this patent infringement action, the plaintiff filed a motion to exclude the defendants’ claim construction experts. The plaintiff’s motion was based on the argument that the defendants’ disclosures did not comply with local rules in that they did not identify the actual opinions of the experts.

The district court agreed with plaintiff’s position. “After consideration of the briefing and of Defendants’ expert disclosures, the Court agrees with Plaintiff that Defendants’ disclosures do not comply with Local Rule 4.2.d.2. insofar as Defendants simply identify the general subjects on which their experts may testify, but do not identify the actual opinions Defendants expect the experts to offer.”
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Four weeks prior to trial, defendant Cerner Corporation (“Cerner”) filed a motion to join a summary judgment motion filed by a defendant in a related case involving the same patents. In the summary judgment motion in the related case involving Allscripts, Allscripts argued that the plaintiff’s (RLIS) patents claim ineligible subject matter under section 101 of the Patent Act.

The motion in the related case was filed in May 2014 and gained strength after the Supreme Court’s decision in Alice Corp. v. CLS Bank Int.’l, 134 S. Ct. 2347 (2014). Yet, Cerner did nothing. As explained by the district court, “[i]n fact, the Court held a lengthy motions hearing on October 1, 2014. Many of the numerous motions argued that day were joined by both Cerner and Allscripts. Rather than asking to join Allscripts’ section 101 motion, Cerner made a tactical decision to sit on the sideline while Allscripts argued the Alice issue to the Court.”
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