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In this case, the defendant asserted a defense of inequitable conduct on the grounds that the inventors of the patent-in-suit were aware of prior art when they prosecuted the patent but failed to disclose that prior art.. On a motion to dismiss the inequitable conduct defense, the United States District Court for the Eastern District of Virginia held that the defendant had plead insufficient factual allegations to support an inequitable conduct defense.

The plaintiff asserted that the defendant had failed to sufficiently plead inequitable conduct because it had not plead that material prior art was withheld, sufficient knowledge of the prior art, and that such prior art was withheld with an intent to deceive the Patent and Trademark Office (“PTO”). The district court started its analysis by noting that inequitable conduct is akin to a claim for fraud and therefore must meet the particularity requirements of Federal Rule of Civil Procedure 9(b) (“In alleging fraud or mistake, a party must sate with particularity the circumstances constituting fraud or mistake.”).
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In a recent decision from the United States District Court for the Southern District of New York, the district court granted defendant’s motion in limine to exclude plaintiff’s damage expert’s testimony based on the entire market value rule. The district court held that the plaintiff’s expert’s testimony ran afoul of the Federal Circuit’s decision in Lucent Technologies v. Gateway, Inc., 580 F.3d 1301, 1336 (Fed. Cir. 2009).

The district court began its analysis by noting in Lucent that “the Federal Circuit announced that its jurisprudence on the entire market value rule–pursuant to which a patentee assesses damages based on the entire market value of the accused product–was quite clear. For the entire market value rule to apply, the patentee must prove that, ‘the patent related feature is the basis for customer demand.'” The district court also noted that in a more recent decision, Uniloc USA, Inc. v. Microsoft, 632 F.3d 1292 (Fed. Cir. 2011), the Federal Circuit “warned against the danger of admitting consideration of the entire market value of the accused product where the patented component does not create the basis for customer demand.”
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A Delaware Court again recently denied transfer from Delaware to the Northern District of California despite that (a) all of the accused infringers were headquartered in the transferee venue, (b) the party witnesses knowledgeable about the accused products and documents related to the accused products were there and (c) the plaintiff also maintained an office there as well. Focusing instead on the fact that the plaintiff and three of the four defendants were incorporated in Delaware, the Court stated that the Plaintiff’s choice of venue was entitled to “significant deference” because Delaware was considered plaintiff’s home turf. Moreover, the Court found that because three of the four defendants were incorporated in Delaware, they could not be heard to complain about defending a lawsuit in Delaware because they had availed themselves of the rights and privileges of the State of Delaware by incorporating there. The Court quoted from another decision from the District of Delaware that “absent some showing of a unique or unexpected burden, a company should not be successful in arguing that litigation in its state of incorporation is inconvenient.”
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In a recent case from the Central District of California, the court ordered the defendant to produce the complete source code for an allegedly infringing product during a deposition. The plaintiff noticed the depositions of certain engineers from the defendant and requested that the defendant provide a complete copy of the source code on a computer during the deposition. The defendant objected on two grounds.

The defendant first argued that such a request and corresponding procedure would violate the protective order entered by the court. The defendant also argued that the proposals offered by the plaintiff were insufficient to maintain the security and integrity of the source code for the allegedly infringing product. The court disagreed with both of defendant’s objections and ordered the production of the source code.
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The plaintiff filed a lawsuit against five companies in the United States District Court for the District of Delaware for patent infringement. All five companies moved to transfer the case to the Northern District of California because none of the defendants had their headquarters in Delaware and they argued it would be more convenient for the witnesses if the case proceeded in the Northern District of California. The district court denied the motion.

The district court began its analysis by noting that the various defendants were incorporated in Delaware and several had their principal place of business in California.. It also noted that the plaintiff was incorporated in Delaware and had its principal place of business in Connecticut.
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In a recent decision from the Eastern District of Texas, the court allowed the testimony of an expert witness on the entire market value theory even though the expert did not provide evidence of consumer demand. The court found that the expert could use the entire market value theory of the accused products in calculating the reasonable royalty because it was economically justified.

The court began by noting that the “entire market value rule” allows for the recovery of damages based on the value of an entire apparatus containing several features, when the feature patented constitutes the basis for the customer demand. Defendants moved to exclude plaintiff’s expert on the ground that the patented feature of the accused product had not been shown to provide the basis for consumer demand. The defendants also argued that it was largely undisputed that, in fact, the patented feature did not provide the basis for the consumer demand of the accused product. The plaintiff argued that the expert was justified in calculating a reasonable royalty based on the entire market value of the accused products as that is the industry standard and because nearly every comparable license in the case was based upon a percentage of the total accused product (or licensed product) sales price.
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Failing to act and follow up on cease and desist letters against potential infringers of a patent may preclude enforcement of the patent. This is particularly true when the patent owner does not begin litigation or execute a license for the patent and, during the intervening time, the potential infringer takes action to build its business in reliance on the patent owners failure to act. These issues were addressed by the Federal Circuit in a recent decision, Aspex Eyewear Inc v. Clariti Eyewear, Inc., 605 F.3d 1305 (Fed. Cir. 2010).

For further details, see a discussion of Aspex.

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In the first district court case applying the Federal Circuit’s new standard for proving inequitable conduct, the United States District Court for the Eastern District of Texas concluded that defendants had failed to prove by clear and convincing evidence that the patents-in-suit were unenforceable due to inequitable conduct.

The case was tried to a jury and the jury returned a verdict finding, among other things, that the asserted claims were invalid. After that finding, the defendants filed a motion arguing that the first inventor committed fraud on the Patent Office by withholding material prior art with an intent to deceive.
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In a case from the Eastern District of Texas, the district court granted an emergency motion to compel pertaining to source code contained on a stand-alone computer. In the case, Hyundai had loaded its source code on a stand-alone computer and provided a standard text-editor (Notepad), a source code editor (Notepad ++) and a comparison tool (Beyond Compare) to facilitate plaintiff’s review of the source code. The plaintiff found that this was insufficient and requested that Hyundai provide integrated development environments to facilitate the review, arguing that the integrated development environment was required to mimic the operation of the source code. Hyundai refused and the emergency motion was filed.

In filing its emergency motion to compel, the plaintiff argued that because of the modular nature of the source code, the integrated development environments would allow its experts to follow various jumps between modules contained in separate files, which would replicate the behavior of the source code during execution. The plaintiff noted that the tools it wanted installed are free and the installation is “virtually effortless.”
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In a recent case from the United States District Court for the District of Delaware, the district court held that the defendant was not liable for patent infringement based on the doctrine of divided infringement. The district court based its ruling on the Federal Circuit’s decision in Centillion Data Sys., LLC v. Qwest Communications Int’l, Inc., 631 F.3d 1279 (Fed. Cir. 2011).

In Centillion, the Federal Circuit analyzed a patent that disclosed a system for collecting, processing, and delivering information from a service provider, such as a telephone company, to a customer. The Federal Circuit focused its decision on the word “use” — agreeing that “direct infringement by ‘use’ of a system claim ‘requires a party … to use each and every … element of a claimed [system.]” Id. at 1285. The Federal Circuit also stated that “to use’ a system for the purposes of infringement, a party must put the invention into service, i.e., control the system as a whole and obtain benefit from it.”
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