Articles Posted in W.D. Texas

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Via Vadis, LLC and AC Technologies, S.A. (“Plaintiffs”) are the owner and exclusive licensee, respectively, of U.S. Patent No. RE40,521 (the “’521 Patent”) for a data access and management system. Plaintiffs accused Defendant Amazon.com, Inc. (“Amazon”) of direct and indirect infringement of the ’521 Patent through Amazon’s software-as-a-service and related services “by supporting the BitTorrent protocol, or other infringing peer to peer file distribution protocol, to transfer files and other data between electronic devices, such as computers.”

Amazon filed a motion to exclude the opinion of Plaintiffs’ damages expert, Paul Benoit, asserting that Benoit improperly based his damages theory on revenue for Amazon’s entire cloud storage service (Simple Storage Service or “S3”). Amazon contended that the non-accused features of that service account for more than 99.999 percent of its revenue and that Benoit violated the entire market value rule by basing his damages analysis on Amazon’s S3 revenue, “rather than looking to the revenue Amazon received or projected to receive from the usage of the BitTorrent interface.”

In opposing the motion, Plaintiffs asserted that Benoit had “articulated evidence reflecting the importance of price as a driver of sales of S3 services, and thus the economic footprint of the invention would not only reflect revenue generated from data transmitted via BitTorrent, but also the ability to attract customers to Amazon’s S3 by reducing the effective price of the service.”

As the district court explained, “[t]he heart of the parties’ disagreement thus is whether the entire market rule is implicated by starting the royalty calculation with total S3 revenues – notwithstanding subsequent apportionment – rather than the market value for the BitTorrent service.” Continue reading

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In this patent infringement action, plaintiff Performance Chemical Company (“PCC”) filed a motion for sanctions based on defendant, True Chemical Solutions (“True Chem”) concealing of evidence until a few weeks before trial.

In analyzing the motion, the district court noted that the allegations of misconduct were largely undisputed:

What distinguishes this case from the more “routine” situation where the Court has to determine whether the allegations of misconduct are true, is that PCC’s contentions of True Chem’s misdeeds are largely undisputed. It is really not in serious dispute that (a) True Chem hid material evidence, (b) True Chem disregarded and disobeyed not just normal discovery practices but a specific mandate from the Court to provide a complete frac trailer for inspection, (c) True Chem failed to preserve evidence and may have destroyed evidence by dismantling a trailer for the specific purpose of hiding evidence of automation, (d) True Chem filed a declaratory judgment action alleging non-infringement without sufficiently reviewing its own documents and emails, and (e) True Chem’s employees — no other phrase encapsulates it — lied under oath when asked direct questions about automation. The Court is therefore forced to conclude that True Chem acted deliberately and in bad faith.

Based on these allegations, the district court was left with the question of what sanction to impose. PCC sought the death penalty sanction. Continue reading

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In this patent infringement action, defendant Athenahealth, Inc. (“Athenahealth”) moved to exclude the plaintiff CliniComp International Inc.’s damage expert testimony of Dr. Nisha Mody, which included a check on the reasonableness of the damage calculation based on an incremental-value analysis.

As explained by the district court, Dr. “Mody’s damages model is based on a reasonable-royalty-rate analysis, which calculates the royalty the parties would have agreed to during a hypothetical negotiation that would have occurred on the eve of infringement. Her analysis multiplies the number of infringing customers by the cost to design around the claimed invention per customer to determine the amount of damages. Mody also performs a second calculation to check the reasonableness of her damages calculation. She refers to this as an “incremental-value” analysis. For the incremental-value analysis, Mody determines that Athenahealth estimated that the athenaOne suite would increase revenue by 10 percent. She then calculates the damages by multiplying 10 percent by the total revenue Athenahealth earned from the athenaOne suite.”

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In this patent infringement action, Intel filed a motion to dismiss the patent infringement claims for direct and indirect infringement pursuant to Fed.R.Civ.P. 12(b)(6). The plaintiff, VSLI Technology (“VLSI”), opposed the motion and argued that its complaint stated facts sufficient to state claims for relief.

In its motion, Intel asserted that VLSI’s claims for indirect infringement should be dismissed because there were insufficient allegations to establish that Intel was willfully blind to the existence of certain patents. The district court concluded that the allegations were insufficient since they were based solely on the allegation that Intel instructed its employees not to review patents from third parties: “The Court finds that Intel’s policy that forbids its employees from reading patents held by outside companies or individuals is insufficient to meet the test of willful blindness.”

Nonetheless, the district court determined that the claims should only be dismissed without prejudice to allow VLSI to re-allege the indirect infringement claims if discovery justified doing so. “Specifically, that the Court will dismiss VLSI’s claims of indirect infringement without prejudice to the refiling of these claims after discovery has been conducted. The Court intends to be very liberal in the discovery that it will allow VLSI to conduct. For example, VLSI may do discovery into its belief that Intel has been provided with notice of unasserted NXP patents, and the reasons for Intel’s failure to ascertain information about the patents asserted in this litigation. If after VLSI has taken discovery it decides to amend its complaint to make allegations of indirect infringement, it will be free to do so, subject to the provisions of Rule 11. Intel can then file a motion for summary judgment with respect to that issue if it wishes to do so.” Continue reading