Articles Posted in N.D. California

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Plaintiff Vasudevan Software, Inc. (“VSi”) filed a motion for sanctions against defendant MicroStrategy (“MS”). The sanctions motion was based on statements that VSi characterized as threats against both VSi and its counsel by an outside counsel and a principal of MS, in conjunction with MS’s filing of a request for reexamination of four of VSi’s patents and another patent held by Zillow, a client of VSi’s outside counsel. Rather than deny that the statements were made, MS asserted that even if the statements were made they could not be sanctioned for making them because of the First Amendment.

The district court explained the background facts as follows: “Sean Pak, a partner at Quinn, Emanuel, Urquhart & Sullivan, LLP, counsel for MS, contacted Brooke Taylor, a partner at Susman Godfrey, counsel for VSi. He requested a meeting include the principals of VSi and MS. Pak said MS was planning to be “aggressive” in defending against VSi’s claims in this case and would take “initiatives” toward that end, including filing reexamination petitions with the USPTO to reexamine VSi’s patents. Pak proposed flying to Seattle (where the Susman Godfrey office in which Taylor works is located) to discuss these “initiatives” with VSi and its counsel. Taylor agreed and Pak, Taylor and Jordan Conners (a Susman Godfrey associate also representing VSi) met in person at Susman Godfrey’s Seattle offices on September 10, 2012. Additional VSi counsel Les Payne and Eric Enger of Heim, Payne, & Chorush, LLP, VSi principals Mark and Helen Vasudevan, and MS Executive Vice President and General Counsel Jonathan Klein participated in the meeting over the phone. Klein stated that he would not pay VSi anything to settle VSi’s patent infringement claims against MS and, if VSi did not immediately dismiss the case, threatened to make the litigation as painful as possible for VSi, file reexamination petitions with the USPTO for all of VSi’s patents in suit, and take action against Susman Godfrey. When Payne specifically asked Klein what he meant by taking action against Susman Godfrey, he refused to answer and suggested that Susman Godfrey would have to wait and see. ”
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In the next round of litigation in the ongoing war between Apple and Samsung over Smartphones, the district court ordered the parties to file a joint status report to address whether the new action should be stayed pending the appeal in the prior litigation. As explained by the district court, “[o]n march 7, 2013, the parties in this action filed a joint status report regarding whether they believed that a stay of this litigation was appropriate pending resolution of the appeal of the parties’ separate litigation in Civil Action No. 11-cv-01846″) See ECF No. 393.”

The district court then declined to stay the case pending the appeal based on the parties’ joint status report. “The District Court has broad discretion to stay proceedings as an incident to its power to control its own docket.” Clinton v. Jones, 520 U.S. 681, 706 (1997). In light of the parties’ joint status report, the Court will not stay the case. Accordingly, Defendants Samsung Electronics Co., Ltd., Samsung electronics America, Inc, and Samsung Telecommunications America, LLC shall not file a motion seeking this administrative relief. If circumstances change, the Court will notify the parties.”
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Avago Technologies (“Avago”) filed a patent infringement action against IPtronics, Inc. (“IPtronics”) asserting infringement of two U.S. Patents, patent nos. 5,359,447 (the ‘447 patent) and the 6,947,456 (the ‘456 patent) in the United States District Court for the Northern District of California. After a second amended complaint was filed, Avago filed a complaint at the International Trade Commission (“ITC”) alleging infringement of the ‘456 patent, but did not allege infringement of the ‘447 patent. The ITC instituted an investigation naming IPtronics as a respondent.

As noted by the district court, “[w]hen parallel actions are proceeding before a district court and the International Trade Commission, 28 U.S.C. § 1659 requires the district court to stay ‘Any claim that involves the same issues involved in the proceeding before the Commission’ until the ‘Determination of the Commission becomes final” upon request by ‘a party to a civil action that is also a respondent in the proceedings before the [ITC].'”
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After the jury found defendant A10 Networks (“A10”) liable for misappropriation of trade secrets and infringement of patents owned by Brocade Communications Systems, Inc. et al (“Brocade”), the court entered two permanent injunctions against A10, one that prohibited additional patent infringement and another that applied to the misappropriation of trade secrets. Subsequently, A10 moved to stay the injunctions pending appeal or, in the alternative, to stay pending a request for a stay from the Federal Circuit, a modification to the injunction to include a sunset provision or a modification to the terms of the trade secret injunction.

First, the court addressed whether A10 was likely to succeed on appeal. The court found these arguments merely repeated from the arguments made in A10’s motion for judgment as a matter of law and that they were once again without merit. The court also found that A10 had not demonstrated irreparable injury and the balance of hardships also tipped in favor of Brocade because Brocade and A10 are direct competitors. Accordingly, the court declined to stay the injunction with respect to patent infringement.
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Positive Technologies, Inc. (“Positive Technologies”) filed a patent infringement action against Sony Electronics and Amazon, among others. Amazon filed a motion for entry of the Federal Circuit Advisory Council’s Model Order regarding E-Discovery in Patent Cases (the “Model Order”). The Model Order provides for specific limits on e-discovery.

There are several provisions of the Model Order that should be noted in particular:

“General ESI production requests under Federal Rules of Civil Procedure 34 and 45 shall not include metadata absent a showing of good cause. However, fields showing the date and time that the document was sent and received, as well as the complete distribution list, shall generally be included in the production.”
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Plaintiff Benjamin Grobler (“Grobler”) filed a patent infringement action against Sony Computer Entertainment America LLC (“Sony”) alleging direct and indirect (both inducing and contributory) infringement. Grobler subsequently filed an amended complaint that removed the contributory infringement claim and asserted a claim for indirect infringement limited to inducing infringement. Sonly filed a motion dismiss the inducing claim.

As explained by the district court, “Grobler filed this suit against Sony, alleging that Sony infringes the ‘084 Patent by making, using, importing, offering to sell, and/or selling in the United States, systems for data vending, including the Sony PlayStation Network system. Id. at ¶ 9. Grobler also alleged that Sony infringed one or more claims of the ‘084 Patent by contributing to and/or inducing its customers’ infringement using such systems. Id. Grobler then filed the AC, limiting the indirect infringement claim to a claim that Sony indirectly infringes one or more claims of the ‘084 Patent by inducing its customers’ infringement using the Sony PlayStation Network system. AC at ¶ 10. Sony now moves to dismiss the induced infringement claims for failure to meet the pleading requirements for indirect patent infringement.”
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In a set of mixed rulings for the parties, the district court denied the parties’ motions for new trial, found Samsung did not willfully infringe Apple’s patents, invalidated certain claims of one of Samsung’s patents, denied Samsung’s motion for indefiniteness of certain of Apple’s patents and denied Apple’s motion for enhanced damages.

Samsung moved for a new trial asserting that the trial was manifestly unfair. Samsung asserted that: “1) the trial time limitation prejudiced Samsung; (2) allowing Apple
to point out to the jury which Samsung witness were not called prejudiced Samsung; (3) Samsung’s witnesses were barred from making some arguments, where Apple’s witnesses were allowed to make other arguments; (4) Samsung was required to lay foundation for documents while Apple was not; (5) Samsung was forbidden to play advertisements while Apple was not; and (6) Samsung could not use depositions to cross-examine Apple’s witnesses while Apple was allowed to used deposition testimony during cross examination.”
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After the recent Federal Circuit decision in the Apple v. Samsung case and the district court’s application of that reasoning to find that a permanent injunction should not issue in Apple’s favor, many predicted that it would be very difficult to obtain a permanent injunction in patent cases going forward where many components are at issue. Not so fast.

As the district court explained in the Brocade Communications Systems (“Brocade”) v. A10 Networks (“A10”), upon the showing of an appropriate causal nexus a permanent injunction should issue. “Some have suggested that these standards herald the death, or at least the wounding, of the permanent injunction in patent cases involving hardware or software products with hundreds or thousands of components. One standard in particular – the “casual nexus” standard – bears the brunt of this discussion. Whether those opinions are fair or even accurate is something this court cannot say. What this court can say, however, is that whatever the “trend” of permanent injunctions in such cases, the Federal Circuit has made clear that injunctions can and should continue to issue upon the assembly and presentation of an appropriate record. After careful consideration of the parties’ voluminous papers and substantial oral arguments, the court is persuaded that the record in this case, which shows a clear causal nexus between Brocade’s loss of exclusivity in its inventions and A10’s infringement, is one such example.”
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Danisco US, Inc. (“Danisco”) filed a declaratory judgment action asserting that its Rapid Starch Liquefaction products (“RSL products”) do not infringe certain patents held by Novozymes and that the patent-in-suit is invalid. Danisco and Novoyzymes are two of the major competitors in the field of developing and supplying industrial enzymes used in the process of converting corn into ethanol fuel.

Novozymes moved to dismiss the action and asserted that Danisco did not allege, and could not allege, that Novozymes took any affirmative act to enforce the patent-in-suit against Danisco. Danisco asserted that there was an actual controversy between the parties because it could be reasonably inferred that Novozymes obtained the patent with the hopes of asserting it against Danisco’s products.
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In a patent case pending before Judge Koh in the Northern District of California, Defendant Pinnaclife Inc. (“Pinnaclife”) moved pursuant to Rule 12(b)(6) to dismiss Plaintiff CreAgri, Inc. (“CreAgri”) infringement claims under Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). The Court denied in part and granted in part CreaGri’s motion finding that Pinnaclife’s amended complaint alleged facts sufficient to plausibly state a claim for direct infringement, but failed to meet the pleading requirements for indirect infringement.

First, the Court held that the pleading standards for direct infringement are governed by Form 18, even though the patent claims at issue were method claims:

[A] claim for direct infringement of a method patent is still a claim for direct infringement, and is therefore governed by the Form 18 pleading standard. Nothing in Form 18 suggests that its applicability is limited to device patents, nor did the Federal Circuit, in confirming that pleading requirements for direct infringement claims are governed by Form 18, suggest that this holding should be limited to device patents.

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