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Acceleration Bay LLC (“Acceleration”) filed a patent infringement suit against Activision Blizzard Inc. (“Activision”) alleging that versions of its popular video games, World of Warcraft, Call of Duty, and Destiny infringed certain of its patents. The trial in the action was postponed when it was not clear as to whether Acceleration had a viable, admissible damage theory.

After the district court permitted the plaintiff to submit a new damage report, the plaintiff submitted a new report from a new damage expert. Activision moved to exclude the new damage report on several grounds and Acceleration also moved to exclude Activision’s damage expert as well. In addition to excluding Acceleration’s damage expert report in several respects, the district court also excluded certain aspects of Activision’s damage expert.

With respect to Activision’s expert, the district court noted that “Ms. Lawton’s assumption of non-infringement of earlier versions of the accused products is baseless and must be excluded.” Activision argued that Ms. Lawton did not opine on non-infringing alternatives but instead assumed non-infringement based on Acceleration not pursuing infringement claims prior to 2012. The district court found this explanation unavailing.

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Los Angeles—Jeffer Mangels Butler & Mitchell LLP (JMBM) Patent Litigation Chairman Stanley M. Gibson was recently recognized by the National Law Journal for the verdict achieved for his client in Medtronic v. Michelson, a patent infringement trial decided in 2004. The $582,000,000 verdict is number 51 on the NLJ’s Hall of Fame, a list of the 100 highest grossing verdicts since 2003.

Gibson and former JMBM partner Marc Marmaro defended Dr. Gary K. Michelson, a Los Angeles inventor, against medical technology company Medtronic in a case involving more than 100 patents. After a five-month jury trial in Tennessee, Dr. Michelson was awarded $110 million in damages, $60 million in patent infringement damages and $400 million in punitive damages. Medtronic subsequently acquired Dr. Michelson’s patents and technology for $1.35 billion.

“The Michelson trial was a complex case that I’m proud to have defended and won for Dr. Michelson,” said Gibson. “I’m pleased to see it recognized by the National Law Journal.”

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In this patent infringement action, Plaintiffs Brian Horowitz and Creative Outdoor Distributors USA Inc. (the “Plaintiffs”) filed a motion for sanctions against Defendant Yishun Chen (“Yishun”) and his counsel, David Lin (“Lin”) for alleged misconduct that took place during the depositions of defendants. The court had previously granted a motion to compel a further deposition, noting “that Lin and Yishun left the room while questions were pending, Lin improperly instructed Yishun not to answer questions, Lin made frequent speaking objections to coach Yishun, and that Lin was disrespectful and personally attacked opposing counsel.”

The court ordered the video transcripts filed so that it could review the depositions for itself. After reviewing the transcripts, the court determined that there were several instances of inappropriate behavior by the Defendants and their counsel. For example, the court explained that:

The court also found that an off-the-record conference between the attorney and Yishun was also troubling. The Court explained as follows: “Gibby asked Yishun when he gave Defendant Kevin Xia the right to protect his patents, to which Yishun replied, “2016, the end of the year, or perhaps it was at the beginning of 2015 when I first started working with him.” Gibby asked, “So, either the end of 2015 or the beginning of 2016,” prompting Lin to object, “I don’t think that’s what he said. I think he said the end of the year, 2016,” and Yishun to answer, “That’s what I remember.” Gibby then asked, “When you gave Kevin the right to protect your patents at the end of 2015 or the beginning of 2016, did you put the right for him to do that in writing at that time?” Lin objected, “I think that misstates his prior testimony. His prior testimony, I believe he said,” causing Gibby to protest that Lin was coaching. Continue reading

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Plaintiffs, Ubisoft Entertainment, S.A. and Ubisoft, Inc. (collectively, “Ubisoft”) are developers and publishers of the video game Rocksmith and own patent no. 9,839,852 (“the ‘852 patent”), which is entitled “interactive guitar game.” Ubisoft filed a complaint against the defendant, Yousician, a software provider for learning to play musical instruments, for direct, induced, and contributory infringement in violation of 35 U.S.C. § 271. Yousician moved to dismiss the complaint on the grounds that the patent is directed to an abstract idea that does not cover patentable subject matter under 35 U.S.C. § 101.

Ubisoft responded to the motion by asserting that the patent’s claims of “assessing a user’s performance for improvement and selectively changing the difficulty level of a song based on that performance, as claimed in the ‘852 patent, is an improvement on the prior art that utilizes computer programming to receive and assess audio signals from a guitar and selectively change the difficulty level to be played by the user and/or generate a different game targeted to improve the user’s skills based on the user’s performance.”

The district court first discussed the relevant standard under the Supreme Court’s Alice decision, which delineates a two-step process for “distinguishing patents that claim of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.” Alice Corp. Pty. Ltd., v. CLS Bank Int’l, 134 S. Ct. 2347, 2354-55. The first step requires the court to determine whether the patent claims at issue are directed toward an abstract idea. Id. If the court concludes the claims are directed to an abstract idea, it proceeds to the second step. Id. At the second step, the court determines whether the patent contains an “inventive concept”– that is, whether there exists “an element or combination of elements that is sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself.” Id. (internal quotations omitted). Continue reading

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Earlier this month, I participated in a roundtable discussion, hosted by Financier Worldwide, on the topic of “Resolving Patent Disputes.” The roundtable participants comprised seven experienced patent lawyers, and we each responded to the questions below.

  • In your opinion, what have been the key trends and developments shaping patent disputes over the last 12 months or so?
  • To what extent have you observed an increase in the number of patent disputes in today’s business world? What are the most common causes of conflict?
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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

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Ethicon filed a motion for summary judgment on one of the Panduit factors that are necessary to obtain lost profits. In its motion, Ethicon contended that Covidien’s alleged non-infringing alternatives were neither acceptable nor available.

https://patentlaw.jmbm.com/files/2019/01/background-close-up-court-1415558-pexels-CC0-01.14.2019-1-300x201.jpgIn evaluating the motion, the district court explained that a “noninfringing alternative need not be on the market during the infringement period to factor into a lost profits analysis.” Wechsler v. Macke Intern. Trade, Inc., 486 F.3d 1286, 1298 (Fed. Cir. 2007). But the district court also noted that where an alleged non-infringing alternative was not on the market during the relevant time period, “a trial court may reasonably infer that it was not available as a non-infringing substitute at that time. The accused infringer then has the burden to overcome this inference by showing that the substitute was available.” Grain Processing, 185 F.3d at 1353 (citation omitted). Moreover, “[t]he acceptable substitute element, though it is to be considered, must be viewed with limited influence where infringer knowingly made and sold the patented product for years while ignoring the substitute.” Panduit, 575 F.2d at 1162, n.9.

Covidien did not dispute that its alleged non-infringing alternatives were not on the market during the relevant time period and, therefore, Covidien bore the burden to overcome the inference of non-availability. See Grain Processing, 185 F.3d at 1353. Covidien contended that at least two non-infringing alternatives to its allegedly infringing device were available during the relevant time period. However, the district court noted that the record showed that it would between 46 and 62 weeks to develop such a non-infringing alternative.

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Cisco moved to dismiss the plaintiff’s patent infringement complaint pre-lawsuit willfulness allegations. As the district court explained, the allegations in the first amended complaint asserted: “(i) that an investor of both the owner of the ‘951 Patent and of OpenDNS informed unspecified employees or agents of OpenDNS that certain OpenDNS technology infringed the ‘951Patent (ii) that defendant acquired OpenDNS in 2015 and (iii) that defendant incorporated the allegedly infringing OpenDNS technology into the Accused Security Products.”

To analyze whether the allegations were sufficient, the district court explained that “[a]t the motion to dismiss stage, courts have concluded that a plaintiff must “plead facts showing willfulness” in order to avoid dismissal of a willful infringement claim. Cont? Circuits LLC v. Intel Corp., No. CV16-2026 PHX DGC, 2017 WL 2651709, at *7 (D. Ariz. June 19, 2017) (collecting cases). In this respect, the complaint must allege, as a “prerequisite” to a willfulness claim, that the defendant had “[k]nowledge of the patent alleged to be willfully infringed.” See WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016). Yet, a plaintiff has not plausibly alleged willful infringement if he alleges only that “the evidence shows that the infringer knew about the patent and nothing more.” Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1936 (2016) (Breyer, J., concurring). As courts have sensibly concluded, the complaint must also allege facts that support a plausible inference that the defendant’s behavior was “egregious,” such as facts showing that defendant was put on notice or was otherwise subjectively aware of the risk that its conduct constituted infringement. See, e.g., Puget Bioventures, LLC v. Biomet Orthopedics LLC, 325 F. Supp. 3d 899, 911 (N.D. Ind. 2018); Finjan, Inc. v. Cisco Systems, Inc., No. 17-CV-00072-BLF, 2018 WL 7131650, at *4-5 (N.D. Cal. Feb. 6, 2018) (collecting cases).”

After reviewing the relevant case law, the district court noted that “[i]t is a close call whether the facts alleged in the First Amended Complaint are sufficient to support a plausible inference that, prior to the initiation of the instant infringement suit, defendant (i) knew of the ‘951 Patent and (ii) was subjectively aware of the risk that its conduct infringed the ‘951 Patent. In its response to defendant’s motion, plaintiff argues that OpenDNS’s knowledge of the ‘951 Patent and awareness of the infringing nature of its technology are attributable to defendant by virtue of defendant’s acquisition of OpenDNS in 2015.”

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After the district court dismissed plaintiff’s patent infringement claims, finding the patents directed to patent-ineligible subject matter, and awarded attorneys’ fees based on the exceptional case doctrine, the Federal Circuit affirmed both determinations. The defendant filed a supplemental motion for attorneys’ fees seeking to recover attorneys’ fees for the appellate process. The plaintiff opposed the motion.

https://patentlaw.jmbm.com/files/2019/05/banner-money-paper-brand-cash-illustration-815076-pxhere-cc0-05.01.2019-1024x405.jpgIn analyzing the motion, the district court explained that it had previously “determined that this case was frivolous and that plaintiff had litigated it in an unreasonable manner, rending the exceptional and entitling defendant to an award of attorneys’ fees. None of those underlying facts have changed, and plaintiff does not argue that they have.”

The court then determined that there was no need to make a second finding of exceptionality. “There is no need to make a second, separate determination under § 285 as to whether the case is exceptional. See, e.g., Dippin’ Dots, Inc. v. Mosey, 602 F. Supp. 2d 777 (N.D. Tex.2009) (rejecting plaintiffs’ argument that defendant had to “make a separate showing that the appeal itself is exceptional” and that fees “have to be separately justified in each phase of a case,” finding that defendant was entitled to fees without a second determination of exceptionality). That is, plaintiffs handling of the case since dismissal need not independently qualify as exceptional. Indeed, plaintiff does not argue here that a second, independent finding of exceptionality is required. As such, this Court’s earlier determination controls, and defendant is entitled to reasonable attorneys’ fees under 35 U.S.C. § 285.”

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In a previous litigation involving ZTE (but not the plaintiff), ZTE entered into a consulting arrangement with Dr. Madisetti. ZTE asserted that ZTE provided Dr. Madisetti with confidential information under the consulting agreement. When the plaintiff in this case, Bell Northern Research (“BNR”) retained Dr. Madisetti as an expert against ZTE, ZTE moved for a protective order to preclude BNR from using Dr. Madisetti as an expert.Image of a gavel resting on tabletop.

ZTE initially asserted that the terms of the Consulting Agreement prohibited Dr. Madisetti from serving as an expert for BNR in this case. BNR responded to that argument that the Agreement is no longer valid and Dr. Madisetti’s expertise in the current litigation would not involve products at issue in the previous matter.

The court agreed with ZTE, noting that the Consulting Agreement provided that it would terminate after the longest of three distinct time periods. “Though two years have passed from the effective date of the Agreement, the latter two time periods are not yet complete. First, Dr. Madisetti has not necessarily completed all work performed under the agreement, because the InterDigital District Litigation remains stayed, and there is a chance that more claims may arise. Second, because the InterDigital District Litigation is currently stayed and not complete—meaning the requisite one-year period following the close of that case has not yet begun—the agreement remains in effect. While BNR is correct that the InterDigital District Litigation has been stayed for a long time and that ZTE has advocated for the litigation to end, the fact remains that the litigation has not ended and therefore, the Consulting Agreement between ZTE and Dr. Madisetti remains in effect.”

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