Articles Posted in N.D. California

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In a recent discovery dispute between Largan Precision Co. and Motorola Mobility LLC, the Northern District of California provided important guidance on two critical issues: the location of plaintiff’s depositions and the application of the apex doctrine for high-level executives.

The Location Battle: Home Court Advantage Prevails

The court’s ruling reinforces a fundamental principle: when you choose to file a lawsuit in a particular district, you better be prepared to show up there. Largan, despite being based in Taiwan, failed to demonstrate any “undue hardship or exceptional circumstances” that would justify conducting depositions in Taiwan rather than California.

The court was particularly unimpressed with Largan’s argument about their witnesses having to “travel thousands of miles and sit for a deposition in a foreign country with a translator.” As Judge Ryu pointed out, this is merely a “conventional inconvenience”–especially in patent litigation where international parties are commonplace.

The Apex Doctrine: Protection vs. Relevance

The more intriguing aspect of the ruling concerns the attempted deposition of Largan’s CEO, Adam Lin. This showcases the delicate balance courts must strike between protecting high-level executives from harassment and ensuring access to relevant testimony. 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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Following Straight Path IP Group’s, the patent owner’s, unsuccessful appeal, Apple and Cisco moved for reasonable attorney’s fees. Although the district court reaffirmed the exceptionality of the patent owner’s prosecution of the case, the district court found that defendants’ fee requests were too high and directed the parties to submit their billing requests to a special master. The order cautioned the defendants to “take care to submit only for time and expenses that truly deserve compensation and at billing rates that truly deserve to be compensated,” stating that the district court might treble the deductions for requests the special master found unreasonable.

After briefing and a hearing, the special master recommended that Apple should receive nearly all it requested, with some minor deductions taken for “certain ambiguous or duplicative time entries.” On the other hand, the Special Master recommended that Cisco should receive only half because its billing records never conformed to the district court’s direction. As part of the reasoning, the special master explained that Cisco did not pay counsel by the hour, rather it paid a flat-monthly fee. As explained by the district court, “[t]he special master found Cisco’s original billing submission deficient and asked Cisco to resubmit. Cisco did so, but the special master found the records remained deficient for an ordinary lodestar review. To be sure, the special master found this alternative billing method compensable under § 285, but the records did not paint a clear picture of counsel’s billable activities or clearly delineate between this case and other, non-compensable work for Cisco. Thus, the special master concluded a 50% reduction would ensure patent owner did not overpay, yet still compensate Cisco for fees actually paid. Finally, the special master declined to treble the deduction, finding Cisco’s noncompliance a product of the alternate billing arrangement and not of bad faith.”

The patent owner subsequently objected that the special master’s awards of fees was too high. Continue reading

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The district court appointed a special master to resolve the amount of attorney’s fees to which Defendants, including Cisco, were entitled.  As the special master noted, the fees claimed by Cisco were paid under an alternative flat monthly fee arrangement with its counsel, which in recent years, have increased as law firms have begun offering alternatives to the traditional hourly billing model.

In analyzing the fee request, the special master explained that “[t]here are advantages to such models, but also risks in circumstances like this where the scope and reasonableness of fees are subject to judicial review. This report concludes that such alternative fee arrangements, whether flat fee or otherwise, may be compensable under Section 285, but that prevailing parties must be required to satisfy appropriate reasonableness standards to ensure fairness and to protect against potential abuse.”

To evaluate whether it would be appropriate to include such arrangements in determining a fee award, the special master noted that “prudential and reasonableness concerns arise when assessing the quantum of these fees to be awarded in a fee-shifting environment. For example, flat-rate billing structures could compensate counsel at an unreasonable rate, much like a large contingency fee, which Cisco acknowledges would not be recoverable in at least an extreme case. Flat-fee arrangements also potentially sweep in fees unrelated to the fee-shifting at issue, such as the exceptional conduct here. And opportunity for mischief exists, such as in cases involving manifestly unequal resources, or where counsel enjoys multiple lines of engagement with the same client that might allow mixing and matching among different matters and the shifting of fees as part of an unwritten understanding between attorney and client.”

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During this patent infringement action, Apple filed a motion for discovery sanctions based on a failure to produce documents after a remand. The parties apparently had agreed to limited discovery post-remand, but a dispute arose over whether discovery before remand should be supplemented or corrected.

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After filing an ex parte reexamination with the Patent Office, the defendant filed a motion to stay the action pending the ex parte reexamination.

In analyzing the request to stay the action, the district court noted that “[t]he decision of whether to stay this case during the potential ex parte reexamination is discretionary.” The district court also explained that courts have inherent power to manage their dockets, including by ordering a stay during a patent reexamination. See Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426-27 (Fed. Cir. 1988). Other cases in this district have considered, in deciding whether to stay a case pending patent reexamination or review, “(1) whether discovery is complete and whether a trial date has been set; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether a stay would unduly prejudice or present a clear tactical disadvantage to the nonmoving party.” Telemac Corp. v. Teledigital, Inc., 450 F. Supp. 2d 1107, 1111 (N.D. Cal. 2006); see In re Cygnus Telecomms. Tech., LLC, Patent Litig., 385 F. Supp. 2d 1022, 1023 (N.D. Cal. 2005).
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In this patent infringement action, IBM filed a motion to compel production of certain documents that were withheld as privileged. IBM contend that time was of the essence when it filed its motion.

The district court was not persuaded by the urgency of the request or that time “was of the essence” because the motion was filed late. As explained by the district court, “IBM’s urgency is belied by the fact that its request is late. Fact discovery closed November 18. Under Civil Local Rule 37-3, IBM’s motion to compel discovery was due within 7 days after the fact discovery deadline. Yet IBM filed its discovery motion on December 13, more than two weeks late.”
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Plaintiff, D Now, Inc. (D-Now), obtained an exclusive license to U.S. Patent No. 8,795,020, which claims a bubble blowing tube. D Now filed a patent infringement action against defendants TPF Toys Limited and TPF Toys LLC (collectively “TPF”). As explained by the district court, “[b]oth parties sell the bubble blowing tube in bouncing bubble kits, wherein the consumer can blow a bubble with the tube then use either gloves (in D Now’s product) or paddles (TPF’s product) to bounce the bubble.”
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After the district court conducted a claim construction hearing (but before it issued an order), the district court stayed the litigation between Finjan and Symantec pending a decision by the PTAB regarding whether to institute an inter partes review (“IPR”) over the asserted patents. When the district court lifted the stay and issued a new scheduling order, Symantec filed a motion seeking additional claim construction briefing another hearing.
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In this long standing litigation between Oracle and Google, a dispute arose over the protective order and whether the disclosure of certain information violated the terms of the protective order when it was disclosed in open court. The district court explained that “[b]y long tradition, when a lawyer wishes to reveal in open court information whose disclosure is restricted by a protective order, the lawyer must first explain the restriction to the judge and (i) ask to seal the courtroom and transcript or (ii) hand up a copy of the restricted information to the judge.”

The district court then acknowledge that this practice “is not explicitly stated in our model protective order (or in the similar protective order adopted in this case), but this practice necessarily flows from the restrictions that are explicit, namely a limited list of allowed recipients that plainly omits the public. Of course, ‘the court and its personnel’ are usually allowed recipients but that phrase does not mean ‘the court, its personnel, and the public.’ Otherwise, the recipe for Coca-Cola or any other highly private information could be blurted out in open court. No one has ever claimed otherwise — until this case.”
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