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During a jury trial, Ericsson asserted that TCL infringed claims 1 and 5 of U.S. Patent No. 7,149,510 (the “‘510 Patent”) by selling phones and devices that included the Google Android operating system. The jury found that TCL infringed claims 1 and 5, that TCL’s infringement was willful, and awarded $75 million as a lump sum royalty. TCL moved for a new trial on infringement and damages. The district court decided the motion for new trial on damages should be granted for the reasons explained below.

The damage theory Ericsson presented at trial was based on the opinions of Dr. William Wecker and Mr. Robert Mills. Dr. Wecker provided analysis of a consumer survey that, according to Ericsson, approximated the apportioned value of the patented invention. Mr. Mills in turn used Dr. Wecker’s survey results to estimate a per phone royalty rate the parties would have agreed to at the hypothetical negotiation. Dr. Wecker’s survey was designed to determine how many consumers that had purchased an Android-based smartphone during the relevant time would have decided against purchasing the phone if the phone lacked the accused security and permissions feature, i.e.: the ability to control whether third-party applications can access native functionality on the phone. Mr. Mills used Dr. Wecker’s survey results to determine a per phone royalty rate. According to Mr. Mills, Dr. Wecker’s survey results indicated that about 28% of consumers who purchased accused TCL phones would not have made those purchases if the phone lacked the allegedly infringing feature.

The district court concluded that there were at least two independent reasons why a new trial on damages was necessary. “The first and most important is that the manner in which Mr. Mills used Dr. Wecker’s survey results is not based on sufficient facts or data, not the product of reliable principles, and not reliably based on the facts of the case. See Fed. R. Evid. 702; Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579(1993). Namely, Mr. Mills directly translated the roughly 28% of survey respondents who allegedly would not have bought a TCL phone without the infringing feature to TCL’s profit in an effort to determine the potential “at-risk” profit. This step in Mr. Mills’ analysis was unreliable.”

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Feit Electric Company and Feit Electric Company, Inc. (collectively, “Feit”) filed a motion to enforce a subpoena for documents to non-parties Amerlux, LLC and Amerlux Exterior, LLC (collectively, “Amerlux”). The complainant in the ITC proceeding, Philips Lighting North America Corp. and Philips Lighting Holding B.V. (collectively, “Philips”) asserted U.S. Patent Nos. 6,586,890; 7,256,554; 8,070,328; 7,038,399 (“the ‘399 patent”); and 7,262,559 (“the ‘559 patent”) against Feit.

Philips had previously asserted two of the patent—the ‘399 and ‘559 patents—against Amerlux in a patent infringement action in the District of Massachusetts (Koninklijke Philips, NV et al. v. Amerlux, LLC et al., Case No. 1-15-cv-13086). This case was dismissed before Amerlux disclosed its invalidity contentions and, therefore, Amerlux never had to disclose the prior art that it had found.

Feit served a subpoena on Amerlux “seek[ing] all prior art to the Asserted Patents known to Amerlux.” Feit subsequently agreed to limit the subpoena to prior art relating to the ‘399 and ‘559 patents. Amerlux contended that the identity of the prior art—other than the references identified in its answer to the complaint—should be protected by the work-product doctrine.

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The plaintiff filed a motion for protective order to prevent the deposition of its litigation counsel. The district court referred the motion for protective order to the special master for resolution.

The special master framed the issue as whether, plaintiff’s litigation counsel, Mr. Chae should be required to provide testimony and information in discovery. “The parties agree that the applicable standard is set forth in Shelton v American Motors Corp., 805 F. 2d 1323, 1327 (8th Cir., 1986). Essentially, the standard to be applied is that the Court must determine that no other means exist to obtain the information other than to depose the attorney; that the information sought is relevant and non-privileged; and that the information sought is crucial to the preparation of the party seeking the discovery.”

The special master noted that Mr. Chae was the prosecuting patent attorney for the utility patent at issue in this case and was also the prosecuting attorney for four design patents, which are the subject of a separate suit that was consolidated. The special master also noted that the district court had already denied the plaintiff’s Motion to Dismiss and Motion to Strike, noting defendants alleged in their affirmative defenses and Counterclaim that the utility patent is invalid under the doctrine of inequitable conduct “because of the actions of [Mr. Chae], who prosecuted the application that matured into the ‘283 patent.” Further, the district court noted that defendants alleged that Mr. Chae failed to disclose prior art to the USPTO during the ‘283 prosecution, “with the specific intent to deceive the USPTO” and also alleged that Mr. Chae never informed the inventor, Mr. Kim, that he had a duty to submit relevant prior art to the USPTO.

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GemShares LLC filed a patent infringement action against Arthur Lipton and Secured Worldwide, LLC (SWW) on U.S. Patent No. 8,706,513 B2 (the ‘513 patent). The ‘513 patent is entitled “global investment grade for natural and synthetic gems used in financial investments and commercial trading and method of creating standardized baskets of gems to be used in financial and commercial products.”

According to the district court, Lipton became a one-fifth owner of GemShares in 2013, while the patent application was pending. Lipton executed an operating agreement that included a term requiring him (and other GemShares members) to disclose and present to the company opportunities related to or likely to be competitive with GemShares’ business.

In its complaint, GemShares alleged that in the fall of 2013, Lipton secretly started working on a business that GemShares alleged is a competing business (SWW). Lipton allegedly created SWW to commercialize products and services that infringe GemShares’ patents, including the patent-in-suit.

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In this patent infringement case, Plaintiff and Counter-defendant Bal Seal Engineering, Inc. (“Bal Seal”) filed a joint stipulation pursuant to Local 37-2 moving to compel Defendant and Counterclaimant Nelson Products, Inc. (“NPI”) to provide further responses to Bal Seal’s Interrogatories. These included contention interrogatories (the “Contention Interrogatories”) seeking “all facts” supporting allegations in NPI’s Second Amended Answer and Counterclaims (“SACC”).

In the joint stipulation, Bal Seal sought to compel responses to twenty interrogatories asking that NPI “state all facts” supporting allegations in its SACC. (Dkt. 129-1 at 11-22 (quoting Contention Interrogatories Nos. 1-11, 16-19, 24-27, and 30).) Bal Seal served the Contention Interrogatories on October 27, 2016 (Nos. 1-11) and May 3, 2017 (Nos. 16-19, 24­27, and 30), yet had received no substantive response as of the Motion’s December 2017 filing (Dkt. 129-3, ¶¶ 4, 8.).

Rather than respond to the interrogatories, NPI had served objections, which included the following statement: “NPI … objects to this request in that it is premature to answer contention interrogatories at this time and NPI will supplement this response at the close of discovery.” (Dkt. 129-1 at 11-22.)

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After that analysis, the district court determined that it would join the majority of “district courts in the Ninth Circuit in finding that allegations of knowledge alone are not sufficient to state a claim for willful infringement. See XpertUniverse, Inc. v. Cisco Sys., Inc., No. 17-cv-03848-RS, 2017 WL 4551519, at *6 (N.D. Cal. Oct. 11, 2017) (“Although [plaintiff] has alleged knowledge and continued infringement, it needs to do more to show that [defendant] has engaged in ‘egregious cases of misconduct beyond typical infringement’ that could possibly warrant enhanced damages.” (quoting Halo, 136 S. Ct. at 1935)); Cont’l Circuits, 2017 WL 2651709, at *8 (“The Court continues to conclude that willfulness must be pled, and that allegations of knowledge alone are insufficient.”); Finjan, Inc. v. Cisco Sys. Inc., No. 17-cv-00072-BLF, 2017 WL 2462423, at *5 (N.D. Cal. June 7, 2017) (“[E]ven if [plaintiff] had adequately alleged that [defendant] had pre-suit knowledge of the Asserted Patents, dismissal would also be warranted because the FAC does not contain sufficient factual allegations to make it plausible that [defendant] engaged in ‘egregious’ conduct that would warrant enhanced damages under Halo.”).

Following that reasoning, the district court reviewed DSS’ allegations and found that they were insufficient to state a claim for willful infringement. “The Court finds that DSS’s allegations are not sufficient to state a claim for willful infringement of the patents-in-suit. Although, DSS has alleged knowledge and continued infringement, it has failed to allege facts suggesting that Lite-On’s conduct amounts to an “egregious case[] of misconduct beyond typical infringement.” Halo, 136 S. Ct. at 1935. “Disagreement about the existence of continued infringement does not necessarily indicate willful or deliberate misconduct.” XpertUniverse, 2017 WL 4551519, at *6. Thus, without more, the facts as alleged do not support a plausible inference that Lite-On’s conduct warrants enhanced damages under Halo and § 284.”

As a result, the district court granted Lite-On’s motion to dismiss the claims of willful infringement.

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The plaintiff, Realtime Adaptive Streaming LLC’s (“Realtime”) filed an ex parte application to file its Certification and Notice of Interested Parties under seal (the “Application”) at the beginning of this patent infringement case.  Realtime asserted that it should be permitted to file the Certification under seal in order to keep confidential the identity of the litigation financing company engaged in the case.

Realtime argued that the agreement between Realtime and the litigation funder “explicitly provides that the identity of the parties to the agreement is itself to be treated as confidential information” and “that all terms of the agreement are to be treated as confidential information.”

The district court began its analysis by noting that the courts recognize a “general right to inspect and copy public records and documents, including judicial records and documents.” Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 & n. 7 (1978). They also “have expressly recognized that the federal common law right of access extends to pretrial documents filed in civil cases.” San Jose Mercury News, Inc. V. U.S. Dist. Court–Northern Dist. (San Jose), 187 F.3d 1096, 1102 (9th Cir. 1999). Thus, “unless a particular court record is one ‘traditionally kept secret,’ a ‘strong presumption in favor of access’ is the starting point.” Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172, 1178 (9th Cir.2006) (quoting Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122, 1135 (9th Cir.2003)). For non-dispositive motions, “a ‘particularized showing’ under the ‘good cause’ standard of Rule 26(c) will suffice.” Id. at 1180 (quoting Foltz, 331 F.3d at 1138).

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Greatbatch moved in limine to preclude the defendant, AVX, from presenting the testimony of AVX’s expert, Dr. Panlener, by deposition. The district court concluded that permitting the expert to testify would deprive Greatbatch of the opportunity to challenge Dr. Panlener’s “credibility and would be unfairly prejudicial, under the totality of circumstances, including Dr. Panlener’s role as an employee and then consultant to AVX, his numerous instances testifying (including as a corporate representative), and representations made as to the termination of his relationship with AVX (which appears to have been related to conduct that may be probative of issues that are the subject of the forthcoming trial).”

The district court also noted that AVX may have “procured” the absence of Dr. Panlener by terminating its relationship with him after relying on his deposition testimony and depriving Greatbatch of an opportunity to cross-examine him regarding that termination and then attempting to rely on Dr. Panlener’s necessarily incomplete testimony at trial. The district court concluded that regardless of whether AVX may fairly be viewed as having “procured” Dr. Panlener’s absence, “the Court agrees with Greatbatch that it would be unfair to permit AVX to secure Dr. Panlener’s self-serving testimony about, for instance, the purported pin washer changes, and thereafter fire him so that AVX can play his deposition to the jury and avoid the specter of his live testimony.”

The district court also disagreed with the defendant’s argument that it was entitled to present Dr. Panlener’s deposition testimony at trial under Rule 32(a)(4)(B) (“A party may use for any purpose the deposition of a witness . . .”). The district court found that the Rule 32 did not  override the district court’s “discretion to manage the trial in a manner that is fair to both sides and consistent with all other applicable rules.” See generally Garcia-Martinez v. City & Cty. of Denver, 392 F.3d 1187, 1191 (10th Cir. 2004) (“Other cases hold that the mere fact that a party is more than 100 miles from the courthouse does not require the district court to automatically admit a party’s deposition.”) (emphasis added).

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The Patent Litigation Group at Jeffer Mangels Butler & Mitchell LLP is pleased to announce that its Chair, Stan Gibson, will be speaking at PLI’s Electronic Discovery Institute 2017: What Corporate and Outside Counsel Need to Know.

Stan’s panel will focus on the “Preservation of Electronically Stored Information (ESI).”

The program is designed for corporate counsel, outside counsel, and other attorneys or risk management professionals who advise corporations on electronic discovery and document retention issues. This program is designed to provide participants with critical information on the latest developments in the law governing e-discovery.

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After this patent infringement action was filed, the defendant, BigCommerce, filed a motion to dismiss for failure to state a claim for relief pursuant to Fed.R.Civ.P. 12(b)(6). BigCommerce did not file a motion to transfer or to challenge at that time.  After the district court ordered the plaintiff to file an amended complaint and the plaintiff filed the amended complaint, BigCommerce filed a motion for improper venue pursuant to Fed.R.Civ.P. 12(b)(3). The BigCommerce motion was filed shortly after the Supreme Court’s decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, No. 16-341, 137 S.Ct. 1514 (May 22, 2017).

BigCommerce argued that although it is incorporated in Texas, it is not incorporated in the Eastern District of Texas and lacks any place of business in the Eastern District of Texas. Therefore, BigCommerce argued it should be dismissed from the case because of improper venue.

The district court concluded that BigCommerce had waived the defense because the defense was not raised in the original Fed.R.Civ.P. 12(b)(6). “A party waives any defense listed in Rule 12(b)(2)–(5) by . . . omitting it from a motion in the circumstances described in Rule 12(g)(2).” Fed. R. Civ. P. 12(h)(1)(A). Under Rule 12(g)(2), “a party that makes a motion under this rule must not make another motion under this rule raising a defense or objection that was available to the party but omitted from its earlier motion.” Certain defenses are exempt from Rule 12(g)(2)’s consolidation requirement, but venue is not one of the exempt defenses. See Rule 12(h)(2)–(3). See Elbit Sys. Land & C41 Ltd. v. Hughes Network Sys., LLC, No. 2:15-cv-37-RWS-RSP, 2017 WL 2651618, at *19 (E.D. Tex. June 20, 2017) (citing Albany Ins. Co. v. Almacenadora Somex, S.A., 5 F.3d 907, 909 (5th Cir. 1993)). “Thus, by filing a motion to dismiss for failure to state a claim under Rule 12(b)(6) and omitting its venue defense, [BigCommerce] waived the defense.” Id. at *20 (citing Fed. R. Civ. P. 12(g)(2) and 12(h)(1)(A)).