Articles Posted in District Courts

Defendant Baker Hughes Incorporated (“Baker Hughes”) filed five inter partes review (“IPR”) proceedings before the Patent Trial and Appeal Board (“PTAB”) asserting that the plaintiff Lubrizol’s patents were invalid because of obviousness. Baker Hughes and a third-party, Flowchem LLC (“Flowchem”) had previously produced documents in the underlying case that they designated “Confidential” or “Highly Confidential” under the district court’s Protective Order.

Lubrizol asserted that the confidential documents would refute Baker Hughes’s obviousness argument in the IPR proceedings and sought a modification of the district court’s Protective Order to allow Lubrizol to use the confidential documents in the IPR proceedings. In particular, Lubrizol asserted that the Baker Hughes documents would reveal evidence of copying, which would refute any contention that the patents were obvious.
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In this patent infringement action, MMEI, owns U.S. patent 6,234,099 (“the ‘099 patent”). Fineline Industries, Inc. (“Fineline Inc.”) entered into a license agreement with MMEI that permitted Fineline Inc. to use the ‘099 patent for its products for the payment of royalties The agreement also provided that any change of majority control in Fineline Inc. had to be agreed to by MMEI in writing. Fineline Inc. converted into a Florida LLC–Defendant Fineline LLC. Fineline LLC continued to use the 2010 license agreement as a successor to Fineline Inc when . MMEI terminated the 2010 license agreement, arguing that Fineline Inc. had breached the license agreement.

On the same day that MMEI filed the patent infringement action, MMEI filed a lawsuit in state court against Fineline Inc. and Fineline LLC for, among other things, breach of contract and breach of the covenant of good faith and fair dealing, including that Fineline LLC was an “unauthorized successor” to the license agreement.
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Huawei and Blackberry filed motions to compel seeking the factual material that the plaintiff, SPH, had relied upon to support its infringement contentions. SPH opposed the motion to compel, arguing that Defendants’ requests seek the universe of documents that SPH’s litigation counsel reviewed and considered to formulate the infringement contentions.

The district court believed that this overstated the Defendants’ requests and this requests were more appropriately directed at the documents upon which SPH relied. The district court stated that “Defendants are entitled to know the facts upon which SPH relies for its claims of infringement so they can respond to SPH’s infringement positions.”
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The defendant filed a motion to strike part of the plaintiff’s initial infringement contentions, focusing on infringement under the doctrine of equivalents and indirect infringement. The defendant asserted that the Local Patent Rules required an explanation of the infringement and plaintiff’s contentions provided none.

The district court noted that Local Patent Rule 2.2(d) requires that for “any claim under the doctrine of equivalents, the Initial Infringement Contentions must include an explanation of each function, way, and result that is equivalent and why any differences are not substantial.”
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In this patent infringement action, the Defendant moved for dismissal based on collateral estoppel and Alice contending that a prior district court had found the patents invalid for lack of patentable subject matter. Before applying the two-step Alice test, the district court took “judicial notice of the fact that Patent ‘046 was found invalid in Joao Control & Monitoring Systems, LLC v. Telular Corp., — F. Supp. 3d –, 2016 WL 1161287 (N.D. Ill. Mar. 23, 2016).

In analyzing the collateral estoppel issue, the district court noted that “the Supreme Court has held that a defense of issue preclusion applies where a party is ‘facing a charge of infringement of a patent that has once been declared invalid,’ even though the party asserting the defense was not a party to the action where the patent was invalidated.” Soverain Software LLC v. Victoria’s Secret Direct Brand Mgmt., LLC, 778 F.3d 1311, 1315 (Fed. Cir. 2015) (quoting Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S. 313, 349-50 (1971)).
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The plaintiff, Grecia, alleged that McDonald’s infringe certain claims of U.S. Patent No. 8,533,860 (“the ‘860 patent”) and of U.S. Patent No. 8,402,555 (“the ‘555 patent”) through its use of the “tokenization systems” of several credit card companies.

As explained by the district court, Grecia alleged that McDonald’s uses the claimed systems when a McDonald’s customer purchases a McDonald’s food item with a credit card, the credit card company’s server acts as a receipt module by receiving the primary account number (“PAN”) assigned to the credit card. The credit card company’s authentication module authenticates the PAN with the issuer of the credit card. Then the credit card company’s connection module establishes a connection between the credit card company’s payment processor and its token service provider. A token is data that serves as a surrogate for the PAN.) The payment processor then acts as a request module and requests from the token service provider the token associated with the PAN. The payment processor then acts as the second receipt module by receiving the token.) The credit card company then writes the token to the token vault, or branding module, so that when the same credit card is used for subsequent McDonald’s purchases, the token associated with the PAN is available to be cross-referenced.
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Sociedad Espanola de Electromedicina Y Calidad, S.A. (Sedecal) filed a patent infringement action against Blue Ridge X-Ray Company, Inc. (Blue Ridge X-Ray), DRGEM USA, Inc. (DRGEM USA), and DRGEM Corporation (DRGEM Corp.), alleging infringement of Sedecal’s U.S. Patent No. 6,642,829 (“the ‘829 Patent”). After a jury returned a verdict finding that the Defendants had infringed the ‘829 Patent, the same jury awarded the Plaintiff $852,000 in damages against all three Defendants in a second trial and found that DRGEM USA, Inc. and DRGEM Corporation’s infringement was willful.

The district court then ordered supplemental briefing on the objective prong of the Seagate case since the jury verdict was rendered before the Supreme Court’s decision in Halo. While the matter was still under advisement, the Supreme Court issued its decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 136 S. Ct. 1923 (2016). In Halo, the Supreme Court overruled Seagate, concluding that the Federal Circuit’s two-part inquiry was “unduly rigid, and it impermissibly encumbered the discretion of district courts.” Halo, 136 S. Ct. at 1932.
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The district court had previously granted a stay pending an inter partes reexamination by the United States Patent and Trademark Office (“PTO”) of U.S. Patent No. 6,797,454 (the “‘454 patent”). After the PTO affirmed the validity of claims 2-6, 15, and 16 of the ‘454 patent, the Federal Circuit unanimously affirmed the PTO’s decision.

Although a reexamination certificate had not yet been issued, the plaintiff argued that the stay should be lifted and further argued that the certificate had not yet been issued only because the defendant had filed a petition for certiorari with the United States Supreme Court. The plaintiff argued that given the extreme unlikelihood that the United States Supreme Court would grant certiorari in this matter, particularly in light of the Federal Circuit’s summary affirmance of the PTO’s decision, the stay be lifted now.
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