Articles Posted in District Courts

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A Texas Court recently granted a plaintiff’s motion to strike the defendant’s non-infringement theory based on the defendant’s failure to previously disclose it. At trial, the defendant attempted to elicit testimony from the plaintiff’s expert witness that the accused website did not infringe, in light of the way it operated. Because the defendant had not previously disclosed this theory of non-infringement at any time before trial, the plaintiff moved to strike this testimony. In granting the plaintiff’s motion, the Texas court rejected the defendant’s argument that it was not required to disclose its non-infringement theory because the plaintiff bears the burden of proving infringement.

In its opinion, the Court reiterated the long held liberal discovery policies in the Eastern District of Texas: “[t]he Eastern District of Texas is well known for it liberal discovery policies and its high expectations that the parties and their counsel be forthcoming in their discovery obligations. Under the Court’s Discovery Order, requests for production are not required; parties are expected to produce all relevant documents without formal requests for production. These policies promote efficient dispute resolution and avoid trial by ambush.”
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Plaintiff filed a declaratory judgment action in California seeking to invalidate defendant’s patents and for a declaration that it did not infringe the patents. The defendant responded by filing a patent infringement lawsuit in Florida in the same court where it had previously filed and litigated a patent infringement matter on three of the four patents at issue in California against an unrelated party. In ruling on defendant’s motion to dismiss the declaratory judgment action, the district court sided with the defendant and dismissed the declaratory judgment action in California even though it was filed before the patent infringement action.

The defendant was a resident of Florida, who owned a patent portfolio pertaining to Ground Data Link (“GDL”) technology that collects flight performance data from aircraft and transmits that information wirelessly to ground-based systems. Defendant had licensed its technology to various companies and also had engaged in prior litigation over its patents in Florida, including proceeding through claim construction and obtaining a jury verdict of infringement of its valid patents.
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The plaintiff filed a patent infringement action against the defendant in the Northern District of Illinois after licensing negotiations fell apart. Defendant, a Delaware corporation, with its principal place of business in Michigan moved to dismiss for lack of personal jurisdiction or, in the alternative, to transfer. The district court granted defendant’s motion to dismiss, finding that it lacked personal jurisdiction over the defendant, but it permitted plaintiff to amend the complaint.

The plaintiff, operating out of Illinois, owned four patents pertaining to laser-etching technology, which is used to etch patterns and effects onto a wide range of materials, including fabrics and leather. Defendant sold leather for use in automotive interiors for distribution throughout the United States, including in the district. The parties had worked together since 2004, with the goal of selling leather etched with plaintiff’s technology to automotive companies. In 2009, the plaintiff sent defendant some samples on a new etching which the plaintiff alleged defendant converted for its own use and sold to an automotive company. Ultimately, the parties began to negotiate a license to resolve these issues, among others. As part of these negotiations, the parties exchanged e-mails and negotiated by telephone as well. When the negotiations ceased, the plaintiff filed suit for patent infringement, breach of a non-disclosure agreement, and trade secret misappropriation, among other claims. The defendant moved to dismiss or transfer venue.
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In a recent case from the United States District Court for the Northern District of California, the district court granted a defendant’s motion to compel an interrogatory response where the infringement contentions were inadequate to put the defendant on notice of the alleged infringement. The infringement contentions relied on a number of screenshot that referred to a specific configuration file. The defendant argued that the screenshots alone failed to explain how the products as depicted allegedly met the limitations of the asserted claims and that the citations to the documents accompanying the infringement contentions also did not supply the missing information.

The defendant served an interrogatory seeking the missing information. The plaintiff refused to respond to any portion of the interrogatory, asserting that its amended infringement contentions contained screenshots that showed the products at each stage of the infringing processes and that the claim charts also contained a detailed narrative and citations to show the infringing processes. The defendant disagreed, arguing that neither the screenshots nor the narrative disclosed the particular configurations of the accused products and were meaningless without an understanding of the custom configuration of the accused products that were used to produce the screenshots.
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Defendant contended that several claims of a patent were indefinite under 35 U.S.C. §112, ¶2. The defendant argued that the term “engine for” should be construed under §112, ¶6 because engine is only discussed in functional terms. The defendant also argued that the term “engine for” did not connote sufficient structure because it does not have a well understood meaning in the art. The district court disagreed with both points and denied the motion for summary judgment.

The patent in the case involved the creation of a web-based database application that used a data dictionary. The patent teaches that the data dictionary eliminates the need for a programmer or web-developer, which reduces the cost and time associated with creating a web-based data application. Certain claims of the patent recited “an engine for” performing various tasks, such as “determining and storing” or “building and/or updating and/or running an application.” The defendant contended that the “engine for” limitations were indefinite and should be construed as means-plus-function claims. It also contended that the “engine for” terms did not recite particular algorithms that performed the functions and were therefore indefinite.
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Recently, a Court in the Central District of California, applying the Patent Rules from the Northern District of California, held that the plaintiff failed to demonstrate the requisite good cause to amend its infringement contentions to add additional accused products. In particular, Plaintiff Kruse Technology Partnership (“Kruse”) sought to add new engines to its infringement contentions based on its recent testing of the engines. In denying Kruse’s motion for leave to amend its infringement contentions, the Court took issue with Kruse for failing to explain why it had not tested the accused engines before it filed its infringement contentions. In doing so, the Court held that “[m]erely stating the tests are expensive is insufficient,” particularly where Kruse was able to later acquire and test the engines at issue. The Court also noted that Kruse never did disclose the cost of the testing. The Court further rejected Kruse’s argument that any disruptions caused by its amended contentions were contemplated by the Patent Rules. The Court found that, while the Patent Rules allow for disruptions caused by timely amending infringement contentions, the disruptions resulting from Kruse’s proposed amendments were not contemplated because Kruse was not diligent in discovering the engines it now seeks to add, and thus its amendments were not justified. The Court found that Kruse’s failure to move to compel discovery on these engines was further evidence of Kruse’s lack of diligence.
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In this case, the defendant asserted a defense of inequitable conduct on the grounds that the inventors of the patent-in-suit were aware of prior art when they prosecuted the patent but failed to disclose that prior art.. On a motion to dismiss the inequitable conduct defense, the United States District Court for the Eastern District of Virginia held that the defendant had plead insufficient factual allegations to support an inequitable conduct defense.

The plaintiff asserted that the defendant had failed to sufficiently plead inequitable conduct because it had not plead that material prior art was withheld, sufficient knowledge of the prior art, and that such prior art was withheld with an intent to deceive the Patent and Trademark Office (“PTO”). The district court started its analysis by noting that inequitable conduct is akin to a claim for fraud and therefore must meet the particularity requirements of Federal Rule of Civil Procedure 9(b) (“In alleging fraud or mistake, a party must sate with particularity the circumstances constituting fraud or mistake.”).
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In a recent decision from the United States District Court for the Southern District of New York, the district court granted defendant’s motion in limine to exclude plaintiff’s damage expert’s testimony based on the entire market value rule. The district court held that the plaintiff’s expert’s testimony ran afoul of the Federal Circuit’s decision in Lucent Technologies v. Gateway, Inc., 580 F.3d 1301, 1336 (Fed. Cir. 2009).

The district court began its analysis by noting in Lucent that “the Federal Circuit announced that its jurisprudence on the entire market value rule–pursuant to which a patentee assesses damages based on the entire market value of the accused product–was quite clear. For the entire market value rule to apply, the patentee must prove that, ‘the patent related feature is the basis for customer demand.'” The district court also noted that in a more recent decision, Uniloc USA, Inc. v. Microsoft, 632 F.3d 1292 (Fed. Cir. 2011), the Federal Circuit “warned against the danger of admitting consideration of the entire market value of the accused product where the patented component does not create the basis for customer demand.”
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A Delaware Court again recently denied transfer from Delaware to the Northern District of California despite that (a) all of the accused infringers were headquartered in the transferee venue, (b) the party witnesses knowledgeable about the accused products and documents related to the accused products were there and (c) the plaintiff also maintained an office there as well. Focusing instead on the fact that the plaintiff and three of the four defendants were incorporated in Delaware, the Court stated that the Plaintiff’s choice of venue was entitled to “significant deference” because Delaware was considered plaintiff’s home turf. Moreover, the Court found that because three of the four defendants were incorporated in Delaware, they could not be heard to complain about defending a lawsuit in Delaware because they had availed themselves of the rights and privileges of the State of Delaware by incorporating there. The Court quoted from another decision from the District of Delaware that “absent some showing of a unique or unexpected burden, a company should not be successful in arguing that litigation in its state of incorporation is inconvenient.”
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In a recent case from the Central District of California, the court ordered the defendant to produce the complete source code for an allegedly infringing product during a deposition. The plaintiff noticed the depositions of certain engineers from the defendant and requested that the defendant provide a complete copy of the source code on a computer during the deposition. The defendant objected on two grounds.

The defendant first argued that such a request and corresponding procedure would violate the protective order entered by the court. The defendant also argued that the proposals offered by the plaintiff were insufficient to maintain the security and integrity of the source code for the allegedly infringing product. The court disagreed with both of defendant’s objections and ordered the production of the source code.
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