Articles Posted in District Courts

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After the jury concluded that LG Electronics had willfully infringed a patent held by Mondis Technology and awarded $45 million in damages, the district court let stand the willful infringement determination but vacated the damage award of $45 million.  The district court concluded that the damage award was based on an invalid theory because it was not properly apportioned under relevant Federal Circuit law.  LG Electronics then asserted that Mondis had waived the right to a damage award based on its reliance of an invalid damage theory under  Promega Corp. v. Life Techs. Corp., 875 F.3d 651, 666 (Fed. Cir. 2017).

In Promega, the Federal Circuit held:

But, as explained above, a patent owner may waive its right to a damages award when it deliberately abandons valid theories of recovery in a singular pursuit of an ultimately invalid damages theory. When a plaintiff deliberately takes a risk by relying at trial exclusively on a damages theory that ultimately proves unsuccessful, and, when challenged, does not dispute that it failed to present an alternative case for damages, a district court does not abuse its discretion by declining to give that plaintiff multiple chances to correct deficiencies in its arguments or the record.

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In this patent infringement action, Plaintiff intended to use a damage expert to support a “lost profits” measure of damages and/or a “reasonable royalty” measure of damages. Defendant moved to exclude the lost profits analysis because the damage expert ignored the testimony of Plaintiff’s corporate designee that contradicted his ultimate conclusion.

In the motion to exclude, as explained by the district court, Defendant argued that the damage expert “ignores” testimony from Plaintiff’s corporate designee (Patrick Cox) that purportedly contradicts his ultimate conclusion that, but for Defendant’s infringement, Plaintiff would have realized the sales that Defendant obtained; and (b) Mr. Holzen “lacks information sufficient to reliably determine [Plaintiff]’s profit per call, because that information is based on negotiated customer agreements, which vary by customer.”

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District Court Permits Ex Parte Communication with Former Employee and Co-Inventor of Plaintiff But Orders Defendants to Turn Over Certain Email Communications

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Stan Gibson and Julia Consoli-Tiensvold

In ICM Controls Corp. v. Honeywell International, Inc., Plaintiffs ICM Control Corp. (“Plaintiffs” or “ICM”) filed a letter motion objecting to ex parte communications between counsel for Defendants Honeywell International, Inc. (“Defendants”) and a former employee and co-inventor of Plaintiffs, due to the possibility that the former co-inventor may have disclosed privileged or confidential information obtained as a result of his employment.

The former employee, Andrew Nguyen, was the co-inventor on the patent at issue in this case alongside Andrew Kadah, the current President of ICM. Mr. Kadah, during Mr. Nguyen’s employment, would have regular communications with co-inventors, including Mr. Nguyen, for the purpose of providing information to legal counsel in order to receive legal advice. Mr. Nguyen left his employment at ICM in 1997, prior to ICM applying for the patent at issue.

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In this patent infringement action, Defendants moved to amend their invalidity contentions and justified the amendment based, in part, on the replacement of its technical expert.

Defendants asserted that its “replacement technical expert (engaged in December 2019 following the passing of prior expert Thomas Gafford) completed an independent review of the current contentions in January 2020 and concluded that, in light of the Court’s rulings on claim construction and ICM’s amended infringement contentions, these additional references would support his explanation why ICM’s doctrine of equivalents theory sweeps in the prior art.”  Defendants also argued that plaintiffs will not be prejudiced by these amendments because the three additional references are “modest” and “originate from the same technical field as those previously charted references;” and because “there [are] still several months before ICM’s June 1, 2020 deadline to respond, giving its technical expert ample time to consider them.”

The court disagreed with this argument, reasoning that “[t]he fact that defendants’ replacement expert found additional prior art and publications that he deemed relevant to the validity of the `645 patent provided no justification for why the defendants or their prior expert did not marshal the same evidence from at least 25 years ago in a more timely fashion.2 The defendants may not exploit the need to replace a deceased expert as an excuse to belatedly make significant changes to their invalidity theories. See, e.g., Apple v. Samsung Elecs. Co., No. C 11-1846, 2012 U.S. Dist. LEXIS 190470, at *61-65 (N.D. Cal. June 27, 2012) (striking numerous expert opinions of invalidity based on theories not previously disclosed in the defendant’s invalidity contentions); Chemfree Corp. v. J. Walter, Inc., 2008 U.S. Dist. LEXIS 93376, at *13-16 (N.D. Ga. Aug. 26, 2008) (denying leave to amend invalidity contentions to incorporate input from a technical expert where the original invalidity contentions were prepared without expert consultation).”

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As many district courts around the country close doors on physical appearances, some district courts are ordering that civil hearings proceed either telephonically or by video. Although such an approach is common in many state courts, it is much more unusual for telephonic or video appearances to occur in district courts. As a result of COVID-19 and the length of time that may be required for continued social distancing, district courts have recognized that telephonic and video appearances will become necessary for many cases.

We should therefore expect more standing orders, similar to the one just issued in the Western District of Texas by Judge Albright. As a result of this order, there will now be specific procedures for hearings that will not require physical appearances. Hearings will continued to take place in the following manner:

All hearings for civil cases on the Waco division’s docket will continue as scheduled, but will occur telephonically. The Court will provide the dial-in information’ either via e-mail or within an order. Because there may be several hearings back-to-back, attorneys should wait until their case is called before speaking. Parties are encouraged to dial-in at least 10 minutes before the scheduled start time.

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Plaintiff Innovation Sciences, LLC (“Innovation”) initiated a patent infringement action against Defendant Amazon.com (“Amazon”).  The original complaint asserted three groups of patents, encompassing a total of ten patents.

After the district court found certain of the patents invalid because they were abstract and the Federal Circuit affirmed, Innovation filed an amended complaint to assert an additional patent and that patent along with two others that were not initially dismissed proceeded to claim construction.  After claim construction, the district court granted Amazon’s motion for summary judgment, holding that Amazon was not infringing one of the patents, that one patent was invalid and Innovation stipulated to noninfringement of the last patent but reserved its right to appeal the construction issue.

The Federal Circuit affirmed as to two of the patents, and affirmed in part, vacated in part, and remanded the stipulated judgment of noninfringement as to that patent.  After that, Innovation jointly stipulated to dismissal.

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The plaintiff, The Hillman Group, Inc. (“Hillman”), moved to disqualify Cooley LLP (“Cooley”) in this patent infringement action based on its relationship with Minute Key that is now wholly owned by Hillman.  Cooley, which had represented Minute Key throughout its acquisition by Hillman, now represented the defendant in this case, KeyMe, LLC (“KeyMe”).  Cooley had represented Minute Key for approximately 10 years before the acquisition by Hillman.

In the motion to disqualify, Hillman alleged two separate grounds why Cooley should be disqualified: (1) that Cooley should be disqualified because Hillman is a current client of Cooley, and, alternatively, (2) that Cooley should be disqualified because Hillman is a former client and Cooley’s representation of KeyMe in this case is substantially related to Cooley’s past representation of Minute Key and the confidential information it received.

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WPEM filed a complaint against SOTI alleging that SOTI’s MobiControl Speed Lockdown technology infringed U.S. Patent No. 9,148,762. WPEM alleged infringement based upon its review of a user manual for version 11 of Speed Lockdown. When it answered the complaint, SOTI pointed out that version 10 of Speed Lockdown predated the asserted patent and was invalidating prior art.

After various demands to settle from WPEM that continually went down in amount, SOTI continued to refer to the prior version of the user manual and sent a Rule 11 letter explaining that the complaint was frivolous, among other things. Ultimately, WPEM offered to dismiss the complaint with prejudice in exchange for SOTI not pursuing attorney’s fees.

When SOTI did not agree to this offer, WPEM file a motion for voluntary dismissal pursuant to Rule 41(a)(2). SOTI did not oppose the motion to dismiss but asserted that it should be required to bear its own fees and costs. After the case was dismissed, SOTI file a motion for a determination that the case was exceptional and sought its attorney’s fees.

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Plaintiff alleged that Defendant Microsoft Corporation’s (“Microsoft”) software infringed the 7,885,981 patent (“the ‘981 Patent”), which pertains to data processing in relational computer databases. Microsoft filed a motion for summary judgment.

After denying the motion with respect to infringement, the district court turned to issue of willfulness. The district court noted that: It is well-settled that knowledge of the non-infringer’ s patent is a necessary element to a claim of willful infringement.” Olaf Soot Design, LLC v. Daktronics, Inc., 325 F. Supp. 3d 456, 461 (S.D.N.Y. 2018); see also Verint Sys. Inc. v. Red Box Recorders Ltd., No. 14-cv-5403, 2016 WL 7177844, at *2 (S.D.N.Y. Dec. 7, 2016) (“For a finding of willful or induced infringement, the law requires that a defendant have had actual knowledge of the patents at issue.”).

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In this patent infringement action, the parties filed a joint motion for a stipulated protective order where they agreed that they could designate certain documents and information produced in the case as “Confidential” or “Highly Confidential – Trial Counsels’ Eyes Only.” The protective order also provided that the confidential information could only be used for the action. The plaintiff, Static Media, designed certain testimony and exhibits from various deposition as Confidential or Highly Confidential, particularly pertaining to a licensing and royalty agreement and Static Media’s sales and revenue information.

The inventory of the patent-in-suit subsequently sent a letter to OJ Commerce alleging infringement of the patent-in-suit. Counsel for OJ Commerce then contacted the counsel for Leader regarding the pending action Static Media had filed against Leader. Leader and OJ Commerce then decided to enter into a joint defense group (“JDG”) where they agreed to work like a group of mutually retained outside counsel for the purpose of common defense and to work together to promote a common joint interest.

After Static Media filed suit against OJ Commerce in the Southern District of Florida, Leader and OJ Commerce executed a joint defense agreement (“JDA”) and Leader’s counsel shared Static Media’s confidential information with counsel for OJ Commerce pursuant to the JDA.

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