Articles Posted in N.D. California

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The plaintiff, [24]7 Customer, Inc. (“[24]/7”), filed a lawsuit against Defendant LivePerson, Inc. (“LivePerson”) alleging that LivePerson infringed several patents pertaining to a customer engagement software platform. After the lawsuit was filed, the parties entered into a stipulated protective order in which the parties agreed that “[a]ny source code produced in discovery shall be made available for inspection, in a format allowing it to be reasonably reviewed and searched, during normal business hours or at other mutually agreed times, at an office of the Producing Party’s Counsel or another mutually agreed upon location.”

Furthermore, the Protective Order provided that “[a]ll source code shall be made available by the Producing Party to the Receiving Party’s Outside Counsel of Record and/or experts on a secured computer in a secured room without Internet access or network access to other computers, as necessary and appropriate to prevent and protect against any unauthorized copying, transmission, removal or other transfer of any source code outside or away from the computer on which the source code is provided for inspection (the “Source Code Computer” in the “Source Code Review Room”).
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Apple filed an objection to EON’s plan to present a technology tutorial through its expert consultant. Apple asserted that the consultant was not disclosed as an expert on whom EON intended to rely upon during claim constructions, as required by the Local Patent Rules. Apple also asserted that the disclosure, which came only two days before the tutorial, was prejudicial because Apple did not have sufficient time to learn about and/or test the consultant’s opinions and credentials.

EON opposed the objection on the ground that Apple already knew of the consultant because he was disclosed under the protective order as someone who would have access to technical information. EON also argued that the consultant did not need to be disclosed because he was not testifying in support of EON’s claim construction positions. EON also argued that it would be prejudiced if the consultant was disclosed since it would be too late for EON to use another expert or present the tutorial through its counsel.
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As the re-trial in the Oracle v. Google case approaches, both parties requested an opportunity to use a jury questionnaire followed by a limited, one hour oral voir dire. The district court reviewed the proposed questionnaire and found that it would not save time and was likely suggested to permit the parties to learn the jurors names and addresses in order to perform Internet research on the backgrounds of the prospective jurors.

The district court explained that “[t]he joint questionnaire and procedure proposed by counsel, however, will not save time. At a minimum, it will add an extra day to the jury-selection procedure while the parties’ neutral vendor collects, copies, and distributes the responses. The proposed questionnaire, moreover, includes vague questions that seem more likely to generate vague answers than accurate answers, which will lead to the need for verbal follow-up and consume even more time.”
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The court explained the facts as follows: The defendant, CrestaTech, was founded by Mihai Murgulescu and George Haber in 2005. Its initial products included a receiver for satellite radio and a television platform. CrestaTech entered the television tuner market in September 2011, when it acquired the assets of Xceive Inc., a company developing and selling television tuners. Among the assets that CrestaTech acquired was the XC5000 series of television tuner products–now the accused products in this suit–which Xceive had developed prior to its acquisition in September 2011. Xceive had been selling the XC5000 since at least January 2007.

The plaintiff, Silicon Labs, began in Austin, Texas, in 1996. In the twenty years since, the company has developed and sold a variety of silicon-based TV tuners, with many name-brand TV sets now Xceive representing that it intended to acquire or merge with Xceive. Silicon Labs performed due diligence in evaluating Xceive and the now-accused products. As part of this process, Silicon Labs and its CEO, Tyson Tuttle, executed a Non-Disclosure Agreement and were provided with a set of Xceive confidential and proprietary documents and items. Among those items was an Evaluation Kit for the XC5000, including a number of XC5000 evaluation boards, on which Silicon Labs performed “extensive tests.”
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Plaintiff Max Sound Corporation (“Max Sound”) filed a First Amended Complaint (“FAC”) against three defendants: Google, Inc., YouTube, LLC and On2 Technologies (collectively, “Defendants”), for the infringement of Patent No. 7,974,339 (the “‘339 patent”). As part of the complaint, Max Sound also included the owner of the ‘339 patent, Vedanti Systems Limited (“Vedanti”), as a party to the lawsuit.

Defendants filed a motion to dismiss pursuant to Fed.R.Civ.Pro. 12(b)(1), asserting that this action must be dismissed because Max Sound lacks standing to sue. As explained by the district court, “[a]ccording to Defendants, VSL had no authority to confer any rights under the ‘339 patent to Max Sound on June 20, 2014, because the true owner of the ‘339 patent at that time was Vedanti. Moreover, Defendants believe the plain language of the June 20th license agreement makes clear that the contract was only between VSL and Max Sound – not Vedanti.”
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After Aylus timely served the report of its technical expert, Daniel Schonfeld, and Apple deposed the expert, Aylus served a “First Supplemental Expert Report of Dan Schonfeld” at the end of the expert discovery period. Apple then filed a motion to exclude the Supplemental Report on the grounds that (1) it was untimely because it contained new opinions regarding joint infringement that could have, and should have, been raised in Dr. Schonfeld’s opening report, (2) that Aylus had no justifiable excuse for the delayed disclosure, and (3) that Apple was prejudiced by the Supplemental Report.

The district court rejected Apple’s first argument because Apple conceded that the Federal Circuit’s en banc opinion in Akamai Techs., Inc. v. Limelight Networks, Inc., 797 F.3d 1020 (Fed. Cir. 2015), which Aylus claimed provided the basis for the Supplemental Report, “modified one aspect of” the control or direction standard for joint infringement. “On a claim for direct infringement of a method patent, the court will hold an entity responsible for others’ performance of method steps under two circumstances: (1) where that entity directs or controls others’ performance, and (2) where the actors form a joint enterprise.” Id. at 1022. The Federal Circuit held that in cases turning on the first ground, “liability under § 271(a) can also be found when an alleged infringer conditions participation in an activity or receipt of a benefit upon performance of a step or steps of a patented method and establishes the manner or timing of that performance.” Id. at 1023. In such cases, “the third party’s actions are attributed to the alleged infringer such that the alleged infringer becomes the single actor chargeable with direct infringement.” Id.
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The district court had previously held that no reasonable jury could find that the plaintiff Corning Optical Communications Wireless LTD (“Corning”) marked its products or otherwise complied with the marking requirements Section 287(a) of the Patent Act. Corning requested that the district court reconsider its ruling.

The district court noted that defendants had produced unrebutted evidence in support of their motion for summary judgment that “[a] sale of an accused distributed antenna system to an American end customer starts with the customer issuing a purchase order to Corning’s American parent. The parent company then issues a purchase order to Corning, and Corning in turn issues another purchase order to a third-party manufacturer. The manufacturer ships the product directly to the end customer in the United States. Corning takes title to a product when it leaves the manufacturer and retains it until it reaches the end customer. Immediately before title transfers to the customer, Corning’s American parent takes ‘flash title,’ temporary legal ownership that lasts only a split second.”
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The district court briefly summarized this patent infringement action that it found frivolous as follows: “In the 1990’s, Segan invented a system for people to browse the Internet. Today, Zynga makes video games that people can play while on Facebook. People don’t browse the Internet while playing Zynga games on Facebook. But Segan sued Zynga for patent infringement. Segan lost at summary judgment, because no reasonable juror could conclude that Zynga’s games infringe Segan’s patent.”

The district court then asked two questions: (1) was “this an “exceptional case” within the meaning of 35 U.S.C. § 285, such that Segan should pay Zynga for its attorneys’ fees?” and (2) should the law firm representing Segan “be sanctioned under Rule 11 for filing and pursuing a frivolous lawsuit?”
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Defendants HTC America, Inc., HTC Corporation, AT&T Mobility LLC, Cellco Partnership, Sprint Spectrum L.P., Kyocera Corporation, Boost Mobile, T-Mobile USA, Inc. and ZTE (USA), Inc. filed a motion to stay pending resolution of an inter partes review before the Patent Trial and Appeal Board (“PTAB”).

The court began its analysis by explain that “[p]art of the quid pro quo of any stay pending inter partes review before the Patent Office is the promise of simplification. Not a guarantee, to be sure, but at least a promise that in exchange for freezing a case on the court’s docket, significant issues may go away for good. Where the IPR will address some, but not all, claims asserted in the district court, relative to the quo the value of the quid shrinks considerably.”
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Aylus Networks, Inc. (“Aylus”) sought documents from Apple “relating to the revenue, costs and profits from (1) purchases or rentals of iTunes video content using the accused Apple TV and/or iOS products iPhone, iPad, and iPod Touch (‘Accused iOS Products’) [and] (2) purchases of video games on the App Store using the Accused iOS Products.” Apple declined to produce the documents and Aylus moved to compel claiming that the information was relevant to its damages claims.

The court began its analysis by noting that Georgia-Pacific factor six examines “[t]he effect of selling the patented specialty in promoting sales of other products of the licensee; that existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.” Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified and aff’d, 446 F.2d 295 (2d. Cir. 1971).
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