Monday, September 18, 2017

PhishMe loses to Wombat in D. Del. on discovery issue



The court noted:



In assessing whether a proposed modification of a Protective Order would present an
unacceptable risk of inadvertent disclosure or competitive misuse of confidential information, it
would be error to deny access solely because of an in-house counsel's "general position"; instead,
"the factual circumstances surrounding each individual counsel's activities, association, and
relationship with a party ... must govern any concern for inadvertent or accidental disclosure."
US. Steel Corp. v. United States, 730 F.2d 1465, 1467-68 (Fed. Cir. 1984);see also Boehringer
Ingelheim Pharm., Inc. v. Hereon Labs. Corp., Civ.A.No. 89-484-CMW, 1990 WL 160666, at
*1 (D. Del. Oct. 12, 1990). This decision will tum, then, on a fact-intensive inquiry into whether
affected counsel (here, Mr. McGee) participates in "competitive decisionmaking" at PhishMe.
US. Steel Corp., 730 F.2d at 1467-68;In re Deutsche Bank, 605 F.3d at 1378. The Federal
Circuit has defined "competitive decisionmaking" as "counsel's activities, [*9] association, and
relationship with a client that are such as to involve counsel's advice and participation in any or
all of the client's decisions (pricing, product design, etc.) made in light of similar or
corresponding information about a competitor." US. Steel Corp., 730 F.2d at 1468 n.3; see also
In re Deutsche Bank, 605 F.3d at 1378-79.

(...)


courts have assessed the extent to which counsel--even if he or she does not
make competitive decisions-nevertheless directly advises other high level executives at the
company, who are themselves competitive decisionmakers in the subject matter areas relating to
the suit in question. See Intel Corp. v. VIA Techs., Inc., 198 F.R.D. 525, 530-31 (N.D. Cal. 2000)
(finding that concerns about the risk of harm from competitive decisionmaking were exacerbated
where a Senior Counsel for plaintiff regularly advised the general managers of the plaintiffs
business unit that were most affected by potential licensing agreements, and advised a Vice-
President involved in competitive decisionmaking who had been denied access to confidential
information by other courts in similar cases, and finding that it would be difficult for the Senior
7 See Blackbird Tech LLC, 2016 WL 2904592, at *4

(...)

Here, it is clear that while Mr. McGee may not be the "final decisionmaker" as to issues
regarding pricing, product design or those otherwise made in light of similar information about a
competitor (like Wombat), he plays a very important role in the process that leads to those
decisions. He provides legal advice to the final decisionmakers (including the company's CEO
and its Board) on these issues. (Tr. at 8-9) Moreover, Mr. McGee is not only the sole in-house
attorney who provides that kind of advice, but in most instances, he is really the only attorney
who ever does so (since outside counsel has not traditionally played any role in that process).
This all militates in favor of denial of the Motion. 9
A third factor, one particular to the patent context,



Press releases can come back to haunt people:



The Court also notes the apparent disconnect between the way PhishMe described
Mr. McGee's role in the November 2016 press release that was issued just after he was hired, and the way it has described Mr. McGee's role since this legal issue arose. In the press release, Mr. McGee is referred to as a "strategic business partner[,]" (D.I. 99, ex. 1 at 1), but now, PhishMe seems to shy away from that kind of description, (Tr. at 10). In the press release, PhishMe also describes Mr. McGee'.s prior work at Mandiant as including "negotiat[ion] and finali[zation]" of Mandiant's sale, (D.I. 99, ex. 1 at 1); but now, PhishMe states that this description is incorrect (or perhaps, at least a bit misleading), (D.I. 103, [*19] ex. 1 at~ 5 (Mr. McGee averring that "I did not negotiate the business terms in connection with the sale ofMandiant")). At a minimum, it seems like PhishMe wanted the reader of that press release to conclude that Mr. McGee had real experience with the kinds of issues and decisions that play an important role in setting a company's future "strategic" course.


Citation: 2017 U.S. Dist. LEXIS 150862

The EZEKIEL ELLIOTT case in ED Texas



The decision observes that a PATENT trial held back the district court from a rapid response:


Because the Court was presiding over a patent trial, the Court was unable to reach the NFL's Emergency Motion within the NFL's requested time constraints which, the Court notes, was less than twenty-four hours after the briefing on the Emergency Motion was complete.

Because the Court did not issue an order on the NFL's Emergency Motion within the NFL's requested period of time, the NFL did, in fact, file an "Emergency Motion for Stay Pending Appeal" with the Fifth Circuit on September 15, 2017. In its Emergency Motion in front of the Court, the NFL is complaining that the Court essentially issued a premature order by failing to wait for the arbitrator to issue his ruling and therefore, lacked subject matter jurisdiction. Oddly, the NFL is now seeking expedited relief from the Fifth Circuit without first waiting for the Court to rule on the identical issue. The irony is not lost on the Court.



Of interest in the case:


Briefly summarized, Kia Roberts ("Roberts"), Director of Investigations, and Lisa Friel ("Friel"), Senior Vice President and Special Counsel for Investigations, investigated allegations of domestic violence made by Thompson against Elliott. After investigating the allegations and interviewing Thompson, Roberts found insufficient evidence existed to proceed with punishment. On the other hand, Friel, determined, without having interviewed Thompson, sufficient evidence existed to proceed with punishment. Roberts's views were kept from the NFLPA, Elliott, Commissioner Goodell's team of outside advisors, and possibly Commissioner Goodell himself. Conversely, Friel's views were shared with Commissioner Goodell and the outside advisors. In light of the background, the Court found that the denial of Commissioner Goodell and Thompson's testimony were gross evidentiary errors that so affected the rights of the NFLPA and Elliott, such that they were deprived of a fair hearing and it constituted misconduct by Henderson.
The Court also agrees with the NFLPA that the balance of the equitable factors weigh against granting a stay. When determining whether to grant a stay, a court must also weigh equitable factors such as the following: (1) whether the movant will suffer irreparable harm absent a stay; (2) whether the non-movant will suffer injury if the stay is granted; and (3) whether a stay serves the public interest. See In re First S. Sav. Ass'n, 820 F.2d at 704.




The outcome: It is therefore ORDERED that Respondents' Emergency Motion to Stay Injunction
Pending Appeal (Dkt. #30) is hereby DENIED



Note 3: The NFL changed the language of the standard from presenting a substantial case on the merits to "serious and substantial questions on the merits." The Court does not automatically [*12] penalize the NFL for the use of substantial questions rather than substantial case, and continues to analyze whether the NFL presented a substantial case on the merits, which is the standard imposed by the Fifth Circuit. The serious question standard applies to the legal questions presented; however if a serious legal question is presented the NFL must show a substantial case on the merits with respect to those serious legal questions. Ruiz, 650 F.2d at 565.

Note 5: The Court additionally notes that the petition to vacate will not be able to be resolved before November 5, 2017 (this would be the sixth game of Elliott's suspension if it started Week 3 of the NFL season). If the Court were to find in the NFLPA's favor and grant the petition to vacate, Elliott would have already served the entirety of the six-game suspension. The Preliminary Injunction Order preserves the status quo while the Court resolves the NFLPA's Petition.

Citation: 2017 U.S. Dist. LEXIS 150758

Saturday, September 16, 2017

US Court of Claims on "epiphany"




The suggestion that defendant's epiphany occurred only after "obtaining" discovery is less than ingenuous. The government was not obtaining discovery, it was responding to plaintiff's requests with its own information. The assertion that the government's investigation of its own records in response to plaintiff's interrogatory constitutes due diligence makes no sense; it certainly does not constitute good cause, particularly when the court has made substantive rulings which, if revisited, would penalize plaintiff, cf. RCFC 24(b)(3), or if not revisited, could potentially prejudice the third party.



from MORPHOTRUST USA, LLC et al., Plaintiffs, v. Patent infringement ice to THE UNITED STATES, 2017 U.S. Claims LEXIS 1112

Sausage war in ED Wisc gets into inequitable conduct


Defendant Klement Sausage argued that when Johnsonville Sausage withheld information about its utility patent application from Sipos, it breached its duty of candor and good faith in dealing with the PTO.

ED Wisc noted:


Klement fails to prove materiality. For the most part, it applies the wrong materiality standard, arguing that Johnsonville withheld information "material to patentability" as the PTO defines it. The PTO's definition of materiality does not apply in patent cases where inequitable conduct is raised, as it is "overly broad," "encompass[ing] anything that could be considered marginally relevant to patentability."

Id. [Therasense] at 1293-95. "[S]uch a low bar for materiality" does not reflect the seriousness and

"far-reaching consequences" of a finding of inequitable conduct. See id. at 1289, 1294. Rather, "the materiality required to establish inequitable conduct is but-for materiality," meaning that the accused infringer must show that "the PTO would not have allowed a claim" but for some nondisclosure by the applicant. Id. at 1291.
To the limited extent that Klement applies the right materiality standard, its arguments still fail. It first argues that Johnsonville's utility patent application is material because it would have shown Sipos that the curved walls of Johnsonville's tray are functional, not ornamental. This argument assumes that ornamentality [*4] and functionality are mutually exclusive. To the contrary, "[a]rticles of manufacture may possess both."

U.S. Patent & Trademark Office, Manual of Patent Examining Procedure § 1502.01 (9th ed. rev. Nov. 2015). In fact, "the design embodied in or applied to an article of manufacture (or portion thereof)" is distinct from "the article itself" and "cannot be assumed to lack ornamentality merely because the article of manufacture would seem to be primarily functional." Id. §§ 1502, 1504.01(c)(I).

Klement also argues that Gehman's rejection of Johnsonville's utility claims as anticipated and obvious and the prior art he cited are material because they would have shown Sipos that the curved walls of Johnsonville's sausage tray lack novelty and nonobviousness. But, Gehman only assessed the functional novelty and nonobviousness of Johnsonville's tray, not the ornamental novelty and nonobviousness of the design embodied in it. A design does not lack novelty or nonobviousness merely because the article in which it is embodied does. See generally id. § 1504. Further, Klement does not explain how the prior art that Gehman cited adds to the prior art that Johnsonville disclosed to Sipos. Compare U.S. Patent No. 5,820,904, and European Patent Application [*5] No. EP1997618, with '249 Patent, and '539 Patent. Prior art that

"teaches no more than . . . the prior art already before" the examiner is cumulative.

Regents of the Univ. of California v. Eli Lilly & Co., 119 F.3d 1559, 1575 (Fed. Cir. 1997)



Case cite: 2017 U.S. Dist. LEXIS 150011

WD Wisc discusses meaning of "ambiguity"




From 2017 U.S. Dist. LEXIS 149885 :



An ambiguity is "something that makes it possible to interpret a document reasonably in more than one way." Rossetto, 217 F.3d at 542. The Seventh Circuit has recognized two types of ambiguities: (1) a "patent ambiguity" is "apparent just from reading the contract without knowing anything about how it interacts with the world"; and (2) a "latent ambiguity" is "recognized as such only when a contract clear on its face -- clear that is, to the uninformed reader -- is applied to a particular dispute." Id. at 542-43.

Third, in determining whether an ambiguity exists, this court is to look at the entire contract to see if either type of ambiguity can be "disambiguated." Rossetto, 217 F.3d at 545. This search goes beyond the CBAs to include accompanying plan documents. See Barnett, 436 F.3d at 832 ("The second portion of relevant contractual language was contained in a CIPS medical plan."); Murphy, 61 F.3d at 564


Friday, September 15, 2017

CAFC affirms PTAB in IDEMITSU KOSAN CO., LTD. case: no obligation to rebut attorney argument with expert witness testimony

The technology relates to organic LEDs [ “Organic
Electroluminescence Device and Organic Light
Emitting Medium.” ]

The issue:



On appeal, Idemitsu does not appear to challenge the
Board’s factual findings with respect to the correspondence
between the ’648 patent’s components and some of
the compounds disclosed by Arakane. Rather, Idemitsu
argues that the Board erred in finding that Arakane
taught combining those particular compounds for the
purpose of creating a light emitting layer in an electroluminescent
device.



The CAFC referenced PTAB:



(“This teaching regarding the energy gap relationship, however,
does not diminish Arakane’s disclosure of the fundamental
concept of forming a light emitting layer containing a
mixture of at least two components, (A) a hole transporting
compound and (B) an electron transporting compound.”).
In other words, the Board found that Arakane
teaches that combining any of the listed HT compounds
with any of the ET compounds would produce a light
emitting layer, and that—if the combination additionally
satisfies the energy gap relationship—then it will feature
improved durability and efficiency as well. Id. at *27-29.


The CAFC noted


This back-and-forth shows that what Idemitsu characterizes
as an argument raised “too late” is simply the
by-product of one party necessarily getting the last word.
If anything, Idemitsu is the party that first raised this
issue, by arguing—at least implicitly—that Arakane
teaches away from non-energy-gap combinations. SFC
simply countered, as it was entitled to do. To the extent
Idemitsu suggests that the Board could not reach a counterargument
because it was not preemptively addressed
by the petition or institution decision, Idemitsu is plainly
mistaken. See Genzyme Therapeutic Prod. Ltd. P’ship v.
Biomarin Pharm. Inc., 825 F.3d 1360, 1366 (Fed. Cir.
2016) (“There is no requirement, either in the Board’s
regulations, in the APA, or as a matter of due process, for
the institution decision to anticipate and set forth every
legal or factual issue that might arise in the course of the
trial.”).
Idemitsu’s only substantive argument on appeal appears
to be that the Board should not have engaged in
fact-finding on this issue without the benefit of additional
extrinsic evidence, such as expert testimony. See, e.g.,
Appellant Br. 43–44. In some cases, that method of factfinding
could indeed be problematic. See, e.g., Perfect Web
Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1330 (Fed.
Cir. 2009) (“If the relevant technology were complex, the
court might require expert opinions.”); Proveris Sci. Corp.
v. Innovasystems, Inc., 536 F.3d 1256, 1267 (Fed. Cir.
2008) (affirming the district court’s requirement of expert
testimony to prove invalidity where “th[e] subject matter
[wa]s sufficiently complex to fall beyond the grasp of an
ordinary layperson”); Brand v. Miller, 487 F.3d 862, 869-
70 (Fed. Cir. 2007) (reversing the Board’s decision to
“reject[] as unconvincing the only relevant testimony” and
independently reach the opposite conclusion).
But here, Idemitsu provided no such supporting evidence
for its own position—that Arakane teaches away
from any non-energy-gap HT/ET combinations. SFC, of
course, bears the ultimate burden of establishing unpatentability,
but it is not required as a matter of law to
rebut mere attorney argument with expert testimony in
order to satisfy that burden. The Board weighed the
parties’ competing arguments—each relying solely on the
text of Arakane itself—and found SFC’s reading to be the
more plausible one. That is precisely what the Board is
supposed to do.




Comment: in the text


First, SFC argued in its petition that "Arakane teaches (i) that the [HT] compound can be an arylamine compound corresponding to Formula (V) of claims 1 and 13, (ii) that the [ET] compound can be anthracene derivatives corresponding to Formulas (I) and (II) of claims 1 and 13, and (iii) that the [HT] compound and [ET] compound are mixed in the organic light emit-ting medium." J.A. 15-16; see also J.A. 189-91. Second, Idemitsu argued in its response that SFC failed to "explain why a skilled artisan would have been led to use" that combination, given that "[t]he energy gap relation-ship limits the combinations of the compounds . . . encompassed by Arakane to combinations satisfying the relationship." J.A. 328. Third, SFC countered in its reply that Arakane does not teach away from "the claimed combination," despite "the absence of demonstrating that the combination would possess the preferred energy gap relationship," distinguishing certain comparative exam-ples. J.A. 382-83; see also Idemitsu, 2016 Pat. App. LEXIS 13340, at *24 -25.



we seem to have a generic disclosure within Arakane rendering obvious a claimed sub-genus. An issue would be "why" one of ordinary skill would have been motivated to select the sub-genus.

Citation to case on LEXIS: 2017 U.S. App. LEXIS 17856

No jurisdiction when claim under patent law is secondary to resolving assignment issue



The outcome


First Data Corporation (“First Data”) and Frank Bisignano
(“Bisignano”) appeal from the district court’s dismissal
of their counterclaims and their declaratory
judgment action under Federal Rule of Civil Procedure
12(b)(1). See Bisignano v. Inselberg, Nos. 15-8301 (KM)
(JBC), 16-317 (KM) (JBC), 2016 U.S. Dist. LEXIS 113563
(D.N.J. Aug. 25, 2016) (District Court Opinion). They also
object to the district court’s order remanding their state
law claims to state court. Because the district court
correctly dismissed the federal claims for lack of subject
matter jurisdiction and we cannot review the remand
order, we affirm.



Of the jurisdiction issue


This court reviews de novo a district court’s order
dismissing claims for lack of subject matter jurisdiction.
Powertech Tech. Inc. v. Tessera, Inc., 660 F.3d 1301, 1306
(Fed. Cir. 2011). The party claiming declaratory judgment
jurisdiction has the burden to establish that jurisdiction
existed at the time the claim was filed. Id.




Citing Bell v. Hood, the CAFC noted:


There, the Court explained
that the failure to state a proper cause of action requires a
judgment on the merits rather than a dismissal for jurisdiction,
but that “previously carved out exceptions are
that a suit may sometimes be dismissed for want of
jurisdiction where the alleged claim under the Constitution
or federal statutes clearly appears to be immaterial
and made solely for the purpose of obtaining jurisdiction
or where such a claim is wholly insubstantial and frivolous.”
Id. at 682–83; see also The Fair v. Kohler Die &
Specialty Co., 228 U.S. 22, 25 (1913) (“No doubt if it
should appear that the plaintiff was not really relying
upon the patent law for his alleged rights, or if the claim
of right were frivolous, the case might be dismissed.”).



The CAFC discussed Jim Arnold:


First Data’s and Bisignano’s argument ignores the actual
context we addressed in Jim Arnold. The assignor in
Jim Arnold stated in its complaint that the assignment
was “null and void” and that the assignee was infringing
the patent. But we did not include this allegation as an
example by which an assignment would be declared null
and void “by operation of law.” See id. at 1576–77. To the
contrary, we explained that the gravamen of the complaint
was founded in state contract law. Similarly, here,
the claims focus on state law contract remedies, and
Inselberg and Interactive admit that they cannot pursue a
patent claim unless a state court grants rescission of the
assignment agreement. See, e.g., Appellees’ Br. 2 (“Eric
Inselberg and Inselberg Interactive, LLC do not own any
patents. They used to own 21 patents, and they have filed
state-law claims to try to get those patents back. But at
the time the cases below were filed, they owned zero (0)
patents.”); id. at 3 (“Inselberg and his company lack title
to the patents, and thus lack standing to bring a patent
claim.”); Oral Arg. at 13:59–14:05, http://oralarguments.
cafc.uscourts.gov/default.aspx?fl=2016-2677.mp3 (explaining
that there is no threat of an infringement claim by
Inselberg against First Data because Inselberg has “no
present ownership of any patents”).




First Data case, D. N.J. 2016-2677, 2016-2696

Thursday, September 14, 2017

Pro se plaintiff fails to establish personal jurisdiction in otherwise interesting case


Of interest is text in the decision [ 2017 U.S. Dist. LEXIS 148859 (ED Ky]:


Mike Ellig was a former owner of Montana Black Gold Inc. and is the current owner of Sight Inc. Ellig responded to Afshari's lawsuit by sending Afshari a letter via e-mail on May 11, 2016. It is that letter that is the root of this action. (DE 1-1, Ellig Letter.) Afshari asserts that, with the letter, Ellig committed various wrongs against him, including defamation, extortion, and blackmail.
In the letter, Ellig asserted that Afshari's fiber-optic bow sight patent was invalid because Afshari's design was actually nothing new; other bow sights employing the same design had been patented before Afshari's. Ellig then went on to address what he believed to be inconsistencies between Afshari's lawsuit against Bear Archery for infringement and Afshari's previous representations to the bankruptcy court that his patents had no value.
"We are also aware that you were currently suing Bear Archery for infringement of your '321 patent at the time your bankruptcy case was filed. However, you disclosed to the bankruptcy trustee that the '321 patent did not have any value." Ellig continued by explaining what he believed to be the significance of the inconsistencies. "Because you were currently suing Bear Archery for infringement, and you were planning on suing Montana Black and/or other archery equipment companies for infringement of the '321 patent, it is clear that you did not believe the '321 patent did not have any value." In Ellig's view, Afshari's actions in the bankruptcy court constituted "misrepresentation and withholding of information" and "could constitute fraud."

He then warned Afshari:
If we were to notify the [bankruptcy] trustee and she agreed to re-open the [bankruptcy] proceedings, she would most likely take control of your infringement claim and the '321 patent as well as all of your other patents. Ben, I really don't want to have to do this but you will force me to re-open your bankruptcy if you disregard all of the above evidence.



The outcome:


As to Black Gold Archery LLC, Afshari does not make any allegations explaining why Ellig's actions should be attributed to it. Afshari does not allege any relationship between Black Gold Archery LLC and Ellig at all. Ellig is a Montana resident. Afshari has submitted evidence that Black Gold Archery LLC is located in Oregon. (DE 15-4, Oregon Sec. of State Filings.) Nor does Afshari allege that any other Black Gold Archery LLC representative took any actions on its behalf. Accordingly, Afshari has not alleged any activity on behalf of Black Gold Archery LLC and the Court cannot find that it has personal jurisdiction over the company. Its motion to dismiss must, therefore, also be granted.
Because the Court has found that it cannot exercise personal jurisdiction over any of the four defendants, Afshari's claims will be dismissed without prejudice. This ruling does not address the merits of any of Afshari's claims. It simply finds that Afshari cannot bring his claims against these defendants in Kentucky

No case/controversy in US for threats of infringement made outside US on non-US patents


In Allied Mineral, 2017 U.S. App. LEXIS 17667, the CAFC addressed DJs in view of a threat of litigation from a foreign patent,

From the decision:



All of Stellar's conduct has been directed towards Allied's customers Ferro and Pyrotek, unrelated Mexican entities, and that contact was limited to Stellar's Mexican Patent and potentially infringing acts in Mexico. Stellar sent notice letters to the customers alone, and although Allied responded on behalf of its customers, Stellar never responded to Allied's letter. [*5] Stellar then sued only the customers, not the manufacturer. Stellar also limited its actions to Mexico. Stellar filed suit in Mexico, suing for infringement of a Mexican patent under Mexican laws. It has not threatened or alleged infringement of the '974 patent in the United States, much less filed suit. Stellar took no actions directed at Allied, no actions with regard to its '974 patent, and no actions under U.S. patent laws.

(...)

Considering the totality of the circumstances, we agree with the district court that there is not a substantial controversy of sufficient immediacy and reality to confer declaratory judgment jurisdiction. Stellar sent notice letters to Ferro and Pyrotek in Mexico, and it sued Ferro and Pyrotek in Mexico. Stellar did not even respond to Allied's letter about the Mexican Patent on behalf of Ferro and Pyrotek. Nor has Stellar taken any action in the United States or any action on the '974 patent. Allied has failed to establish a case or controversy regarding Stellar's U.S. patent in the United States under Article III.

In Intellectual Ventures v. Motorola, Judge Newman challenges nonobviousness finding



The outcome of the Intellectual Ventures case [ 2017 U.S. App. LEXIS 17666 ]:


We hold that substantial evidence supports the jury's verdict regarding the validity of claim 41 of the '144 patent and claims 1, 10, 11, and 13 of the '462 patent, but conclude that substantial evidence does not support the jury's verdict of direct infringement of claim 41 of the '144 patent. Since a finding of direct infringement is a predicate to any finding of indirect infringement, we reverse all of the infringement findings with respect to the '144 patent. We therefore affirm the district court's judgment in part, reverse in part, and remand for further proceedings on the asserted claims of the '462 patent.
Background




Judge Newman dissented in part:


I agree with the holding of non-infringement of the '144 patent, and join the judgment of reversal of the district court's judgment of liability with respect to that patent.1 I respectfully dissent from my colleagues' sustaining the validity of the '144 and '462 patents, for I believe that the claims in suit would have been obvious to a person of ordinary skill in the field of the invention.

(...)

Although my colleagues state that "the jury was free to disbelieve [Motorola's] expert and credit [IV's] expert," Maj. Op. at 12 (alterations in original), the court's obligation is to assure that questions of law are correctly decided, and that for factual disputes, substantial evidence on the record as a whole supports the legal conclusion. The question of law is whether a person of ordinary skill in this art would deem it obvious to combine an authenticating step as in Micali, with the process of Overend. See 35 U.S.C. § 103 (whether "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.").

(...)

Applying law and precedent, the combination of Overend and Micali renders claim 41 obvious. First, "when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result." KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 416, 127 S. Ct. 1727, 167 L. Ed. 2d 705 (2007). And second, "[w]hen a patent simply arranges old elements [*37] with each performing the same function it had been known to perform and yields no more than one would expect from such an arrangement, the combination is obvious." Id. at 417 (internal quotation marks and citation omitted). The Court explained that "a court must ask whether the improvement is more than the predictable use of prior art elements according to their established functions." Id.

In light of the evidence, no reasonable jury could have found claim 41 to be nonobvious. There is not substantial evidence that a receipt confirming delivery is not a delivery confirmation message as in the prior art, especially given the express teachings of Micali's authenticating device. A "patent for a combination which only unites old elements with no change in their respective functions . . . obviously withdraws what already is known into the field of its monopoly and diminishes the resources available to skillful men." Id. at 415-16 (quoting Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 152-153, 71 S. Ct. 127, 95 L. Ed. 162, 1951 Dec. Comm'r Pat. 572 (1950)).

Wednesday, September 13, 2017

Attorneys fees denied in ULTRATEC v. SORENSON COMMUNICATIONS


Defendants had prevailed on a JNOV [ After trial, the court granted defendants' motion for judgment as a matter of law that the '398 patent is invalid as obvious. ] and sought a fee award.

From the decision:



The question is not governed by clear-cut rules, but the court's discretion is guided by the purpose of fee-shifting under § 285, which is to dissuade unreasonable lawsuits and litigation tactics by compensating the prevailing party for enduring them. See, e.g., Commil USA, LLC v. Cisco Sys., Inc., 135 S. Ct. 1920, 1930-31 (2015). The court should not award fees to punish a patent holder simply for failing to prove infringement. Gaymar Indus., Inc. v. Cincinnati Sub-Zero Prods., Inc., 790 F.3d 1369, 1373 (Fed. Cir. 2015) (citing Octane, 134 S. Ct. at 1753). A litigation position that seems obviously wrong after a decision on the merits might have seemed reasonable when judged without the benefit of hindsight. And fee-shifting in routine cases would deter legitimate efforts to enforce patent rights. So the court will award fees only if there has been some [*3] conduct that warrants imposing on the losing party the additional burden of paying the other side's attorney fees. The court need not find that the losing case was frivolous, or that it was brought in bad faith for an illegitimate purpose (although that would clearly warrant fee-shifting). See Lumen View Tech., LLC v. Findthebest.com, Inc., 24 F. Supp. 3d 329, 335 (S.D.N.Y. 2014), aff'd, 811 F.3d 479 (Fed. Cir. 2016). Such clearly inappropriate cases and tactics would be sanctionable pursuant to Rule 11 or the court's inherent powers even without § 285.

Because the purpose of § 285 is to compensate parties forced to defend against unreasonable litigation and to deter improper conduct, a good way to think of the question is this: was the losing party's case so unusually weak on the merits that it suggests an improper purpose or demonstrates irresponsible conduct that should be deterred? Or, is there other evidence, besides substantive weakness on the merits, that suggests an improper purpose? With these questions in mind, the court turns to the parties' arguments.
Defendants argue that plaintiffs knew their patent was invalid as obvious over their own prior art, the CapTel trials combined with U.S. Patent Publication No. 2002/0085685 (the
'685 publication), yet argued during litigation that the CapTel trials weren't [*4] prior art, but rather were an experimental use. They complain that plaintiffs mischaracterized the evidence concerning the trials and made "objectively baseless arguments that contradicted well-settled legal principles" concerning the experimental-use exception. Dkt. 735, at 13.

(...)

So although plaintiffs' position concerning the CapTel trials was not ultimately successful, it was far from unreasonable. Whether the trials were an experimental use was a close call, especially in the uncharted territory of applying the experimental use exception within the context of prior art.



citation: 2017 U.S. Dist. LEXIS 148132 (WD Wisc 2017)

Domain name case in ED Va




Before the Court are Proposed Findings of Fact and Recommendations ("Report") issued by a magistrate judge on August 24, 2017 [Dkt. No. 19]. The Report recommends that plaintiff's Motion for Entry of Default Judgment [Dkt. No. 15] be granted, that VeriSign, Inc., the registry of domain name, 411mania.com (the "Infringing Domain Name"), be ordered to require the current registrar to transfer the registrations for the Infringing Domain Name to plaintiff, 411Mania.com, LLC, and that Defendant John Doe be dismissed without prejudice. The Report advised the parties that any objection to the Report had to be filed within fourteen days of service of the Report and that failure to file a timely objection barred appeal of "any finding or conclusion accepted or adopted by the District Judge except upon grounds of plain error." Report at 19. As of September 11, 2017, no objections have been filed by any party.
Plaintiff brings an in rem action under the Anticybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. § 1125(d). Accordingly, [*2] the Court has subject matter jurisdiction over this action pursuant to 15 U.S.C. § 1121 and 28 U.S.C. §§1331 and 1338(a). Venue is proper under the ACPA because VeriSign, Inc., the domain name registry is located in this district. 15 U.S.C. §§ 1125(d)(2)(A) and (C).
The Court has in rem jurisdiction over the Infringing Domain Name pursuant to 15 U.S.C. § 1125(d)(2)(A). Under this provision, a court in the judicial district in which the domain name registry is located has in rem jurisdiction if "the domain name violates any right of the owner of a mark registered in the Patent and Trademark Office" and the owner of the mark "is not able to obtain in personam jurisdiction over a person who would have been a defendant in a civil action" under the ACPA or "through due diligence was not able to find a person who would have been a defendant" after sending notice of the claimed violation and the owner's intent to file suit to the registrant. 15 U.S.C. § 1125(d)(2)(A).




from 411 MANIA.COM, LLC, Plaintiff, 2017 U.S. Dist. LEXIS 147547

ED Texas on Daubert/Kumho issue


Plaintiff Network-1 moved to exclude certain opinions of expert Ambreen Salters, as unreliable.

However, to the extent Plaintiff disagrees with the accuracy of Salters's decision to treat the fluctuating numbers in the spreadsheet as variable costs, or her decision to be conservative by treating only 50% of the operating costs as variable based on Thompson's deposition testimony, these concerns are best addressed through vigorous cross examination at trial, not wholesale exclusion. These concerns, as well as the other concerns Plaintiff has raised in the briefing, go to the weight, not admissibility of Salters's testimony.




from NETWORK-1 TECHNOLOGIES, INC. v. RWS-KNM ALCATEL-LUCENT USA, INC., ET AL., 2017 U.S. Dist. LEXIS 147812

Tuesday, September 12, 2017

The unintended consequences of eBay


A law review article shows that the impact post-eBay on the granting of injunctions varies by industry type.
From Table 1:


Table 1. Industry classification and injunction grant rate by industry
Industry Sector Grant Rate
Other 90.6%
Chemistry /Chemical 88.9%
Pharmaceutical 84.2%
Biotech 83.3%
Consumer Goods 81.0%
Transportation 76.4%
Computers/Electronics 63.0%
Software 50.0%
Medical Devices 46.2%




from The Unintended Consequences of the Injunction Law after eBay v. MercExchange: An Empirical Study of the Effects on Injunctions in Patent Law
99 J. Pat. & Trademark Off. Soc'y 249 (2017)

One recalls in 2006 LBE wrote an article titled "Will there be Unintended Consequences from the Supreme Court Decision in eBay v. MercExchange?"

In 27 Rev. Litig. 1 (2007), Douglas Laycock wrote:


in eBay Inc. v. MercExchange, L.L.C., n6 where the Court substantially rearranged the standards for granting permanent injunctions without appearing to realize it had changed anything. Recognizing that there can be sound reasons for limiting or refusing injunctive relief, Professor Rendleman would treat those reasons as in the nature of affirmative defenses to plaintiff's prima facie entitlement to an injunction ordering defendant to obey the law. My own view is that his proposal states what the law has been in practice for a long time, n7 and that the Court's opinion has now moved formal doctrine further from reality than it was before. Litigators and trial judges would be much better off if the eBay opinion could have been assigned to Professor Rendleman.


In Modern American Remedies: Cases and Materials at 426 (4th ed. 2010) Douglas Laycock argued that there was "no traditional four-part test" and that the Supreme Court majority's citations supporting this test are misplaced in cases related to preliminary injunctions.

One notes also the text in 27 Rev. Litig. 161 (2008) :


in a very different context, the Supreme Court's decision in eBay Inc. v. MercExchange, L.L.C. n13 is a spectacular example of the confusion that can result from litigating a remedies issue without a remedies specialist. But the reality is that except for consulting opportunities for law professors, the practice of law does not support remedies specialists. It is only teachers and students who have the freedom to consider remedies apart from underlying questions about liability, and thus only law professors who can specialize in remedies.


Copyright defendant wins motion for reconsideration in SD Miss



As to the law:



"A Rule 59(e) motion calls into question the correctness of a judgment." Templet
v. Hydrochem Inc., 367 F.3d 473, 478 (5th Cir. 2004). There are three grounds for
altering or amending a judgment under Rule 59(e): "(1) an intervening change in
controlling law, (2) the availability of new evidence not previously available, or (3) the
need to correct a clear error of law or prevent manifest injustice." Williamson Pounders
Architects, P.C., 681 F. Supp. 2d 766, 767 (N.D. Miss. 2008).




There was a correction of a factual error:


First, Defendant argues that the Court erred in holding that the record contains
no evidence that she paid the filing fee to accompany her application for copyright
registration. Defendant is correct. The record contains an e-mail receipt from Pay.gov
demonstrating that Defendant's attorney remitted the $35.00 filing fee. See Exhibit I
at 4, Dennis Pierce, Inc. v. Pierce, No. 2:16-CV-102-KS-MTP (S.D. Miss. July 3, 2017),
ECF No. 52-9.



Summary judgment was inappropriate:



As for the other arguments raised in Plaintiffs' Motion for Summary Judgment
- that Defendant created the mark as a "work for hire," that Dennis Pierce was a "joint
author" of the work, that the mark lacks the requisite creativity and originality to
receive copyright protection, and that Defendant granted Dennis Pierce an irrevocable
license to use the mark - the Court finds that there are genuine disputes of material
fact that preclude summary judgment on these bases. Moreover, Plaintiffs cited no
legal support for their "misuse of copyright" argument.
The Court grants Defendant's Motion for Reconsideration as to her copyright
infringement counterclaim.


See Pierce v. Pierce, 2017 U.S. Dist. LEXIS 147075

UNIFRAX I, LLC loses on JNOV at D. Delaware


There is both an issue of "argument not made" AND improper referencing in the brief:


Defendant makes the new claim construction argument that if a material serves more than
one function, such as, as both a dispersant and a carrier, then that material would count towards
the "l 00% by weight" limitation because it qualifies as a carrier. Defendant did not argue this
specific issue in its claim construction briefing. (See generally D.I. 74). Defendant had
numerous opportunities to raise this specific issue prior to trial, but Defendant did not do so.
Indeed during summary judgment arguments, Defendant represented that "the [*5] correct claim
construction is the one the Court gave which is there cannot be resin or adhesive in the vermiculite." (D.I. 282, 26: 10-17).

I do not understand Defendant's citations at D.I. 370, page 34, footnote 17 to amount to an adequate request for additional claim construction of this issue. Defendant did not preserve this specific argument as a basis for JMOL at trial either. Thus, this argument is waived. See, e.g., LG Elecs. US.A., Inc. v. Whirlpool Corp., 798 F. Supp. 2d 541, 551 (D. Del. 2011) ("A party dissatisfied with a jury verdict may not prevail on a post-verdict motion for JMOL based on grounds not raised in the pre-verdict motion for JMOL."); Dura-Last, Inc. v. Custom Seal, Inc., 321F.3d1098, 1107 (Fed. Cir. 2003) ("[I]t would be constitutionally impermissible for the district court to re-examine the jury's verdict and to enter JMOL on grounds not raised in the pre-verdict JMOL."). Even if it were not waived, I think Defendant's new construction is an overly broad interpretation of what counts towards the 100% by weight limitation. Defendant's new construction seems to contemplate that even residual dispersants could count towards this limitation. See Kaneka Corp. v. Xiamen Kingdomway Grp. Co., 790 F.3d 1298, 1304 (Fed. Cir. 2015) ("A claim construction that excludes a preferred embodiment is 'rarely, if ever, correct."'). [*6] For the reasons given in my Markman opinion, that cannot be the correct reading. (See, e.g., D.I. 86 at p. 14 (noting that the specification provides that "[t]he refractory layer may comprise some residual dispersant arising from incomplete drying of the platelet dispersion during manufacture")).





Of the issue of juror confusion:



During the cross-examination of Dr. Nosker, Defendant objected, "Mr. Levine is suggesting to the jury that the construction of the claim is that only resins can be carriers when, in fact, it is the carrier such as a resin or adhesive. I'm just concerned that ifhe continues to suggest that, they're [*8] going to be confused." (Tr. 1208:2-9). I overruled that objection, stating that Mr. Levine "hasn't explicitly suggested that. You know, it seems like something you could bring up on redirect." (Tr. 1208:10-13).
Before I excused the jury to begin deliberations, Defendant further requested "a corrective instruction that carriers are not limited to the examples of resins, adhesives paper or cloth. I think that Mr. Levine implied strongly that it is a limiting construction and it's not." (Tr. 1848:10-15). I overruled that objection, stating, "I think the instruction that I've given that's in the book as to what it is is sufficient, so I'm not going to give that." (Tr. 1849:2-5).
There is no miscarriage of justice here. I do not think a jury was misled to believe that a carrier can only be resins or adhesives. Mr. Levine never argued that a carrier can only be resins
or adhesives. Indeed, Mr. Levine made clear that resin and adhesives are merely examples of
carriers. (Tr. 1839: 10-19). My construction, which was provided to the jury, further served to mitigate juror confusion.



Case: DuPont v. Unifrax, 2017 U.S. Dist. LEXIS 146950


Cablz loses at CAFC. Matters of waiver and motivation to combine.




Following institution of inter partes review, the United
States Patent Trial and Appeal Board found every
claim of U.S. Patent No. 8,366,268 (“’268 patent”) unpatentable
as obvious. Cablz, Inc., the owner of the ’268
patent, appeals from this decision, arguing that substantial
evidence fails to support the Board’s obviousness
determination and that the Board failed to adequately
explain a motivation to combine the prior art. Finding no
error in the Board’s decision, we affirm



The technology relates to holding eyeglasses on:


The ’268 patent is entitled “Eye Wear Retention Device.”
As the patent explains, people have long been using
devices like chains, strings, and ropes to retain their
glasses around their necks. A significant problem is that
such devices rest directly against the wearer’s back or
neck, which can cause the device to become entangled
with clothing or coated with sweat or suntan lotion. The
’268 patent purports to solve the problem and discloses an
eyewear retainer that “extends rearward from the head of
the wearer and is suspended off the neck of the wearer.”
J.A. 40 at Abstract.



The cited prior art in this case is of interest.

The topic of waiver arose:


As an initial matter, we conclude that Cablz waived
its argument that Monroe fails to disclose a “resilient”
cable or member because it failed to raise this argument
in its briefing before the IPR oral hearing. The court
retains case-by-case discretion over whether to apply
waiver. In re Nuvasive, Inc., 842 F.3d 1376, 1380 (Fed.
Cir. 2016)

(...)

As a result, we do not have the
benefit of the Board’s informed judgment on the specific
reading of Monroe that Cablz advances on appeal. The
argument is thus waived. See Watts, 354 F.3d at 1368.



Query: when the Board, or other trial court, ignores
an argument actually presented, the reviewing court is also deprived of
the benefit. Does the reviewing court then vacate?

Of motivation to combine:


We may affirm the Board’s ruling if we reasonably
discern that it followed a proper path, even if that path is
less than perfectly clear. Nuvasive, 842 F.3d at 1383
(citing Bowman Transp., Inc. v. Ark.-Best Freight Sys.,
Inc., 419 U.S. 281, 285–86 (1974)); Ariosa Diagnostics v.
Verinata Health, Inc., 805 F.3d 1359, 1365 (Fed. Cir.
2015).
The Board’s decision provides a reasonably discernable
path for articulating a motivation to combine the prior
“one of skilled in the art would have ‘immediately recognized
that a simple substitution of the eyewear retainers
of Mackay for the attachment method employed in Monroe
would have had various advantages.’” Chums, 2016
WL 763054 at *5. The Board similarly summarized
Appellee’s arguments regarding a motivation to combine
the other prior art references. Id. at *5–6. After analyzing
the arguments, the Board concluded that achieving
the ’268 patent’s configuration required only “simple
substitution.” Id. at *11.
The Board also addressed and rejected each of Cablz’s
arguments that there was no motivation to combine the
prior art. First, the Board found no persuasive reason
why the cited combinations “taught away” from the ’268
patent’s invention. Id. at *8. Second, the Board rejected
Cablz’s argument that Mr. Sosin failed to recognize and
solve the “being in the way problem.” Id. at *8–9. Third,
the Board found the age of the references and the fact
that Appellees did not combine the references to create
their own product did not preclude a motivation to combine
the prior art. Id. at *9–10. Ultimately, the Board
concluded that Appellees provided “strong evidence of
obviousness.” Id. at *15. Taken together, we may reasonably
discern that the Board found a motivation to
combine the references because doing so would have been
a matter of simple substitution that would result in an
eyeglass retainer with certain advantages.

Monday, September 11, 2017

D. Delaware addresses Heartland venue issue in case involving BMS' Eliquis®

The Dustrict Court of Delaware noted:


On July 25, 2017, MPI moved to dismiss for improper venue under Federal Rule of Civil
Procedure 12(b)(3), contending that venue is not proper under either the residency or place of
business prongs of§ 1400(b).

(...)

Venue in a patent infringement action is governed solely and exclusively by the patent venue statute, 28 U.S.C. § 1400(b). See TC Heartland, 137 S. Ct. at 1516. The general venue statute, 28 U.S.C.
§ 1391(c), does not have any application in a patent case. See id. at 1521.
If the Court grants a Rule 12(b)(3) motion based on improper venue, the Court "shall
dismiss, or if it be in the interest of justice, transfer such case to any district or division in which
it could have been brought." 28 U.S.C. § 1406(a).

Generally, "it is not necessary for the plaintiff to include allegations in his complaint
showing that venue is proper." Great W Mining & Mineral Co. v. ADR Options, Inc., 434 F.
App'x 83, 86-87 (3d Cir. 2011). Hence, when confronted with a motion to dismiss for improper
venue, the Court may consider both the complaint and evidence outside the complaint. See 14D
Wright & Miller, Federal Practice & Procedure§ 3826 (4th ed. 2017). The Court will accept any
venue-related allegations in the complaint as true, unless those allegations are contradicted by the
defendant's [*8] affidavits. See Bockman v. First Am. Mktg. Corp., 459 F. App'x 157, 158 n.l (3d
4While § 1406(a) authorizes the Court to either dismiss or transfer a suit brought in an improper venue, for simplicity this Opinion will refer to the improper venue motion as a "motion to dismiss."

(...)

Courts are not uniform in their views as to which party bears the burden of proof with
respect to venue. Some hold that a plaintiff must prove that venue is proper in its chosen district,
while others hold instead that a defendant must prove that such district is an improper venue. See
14D Wright & Miller, Federal Practice & Procedure§ 3826 (4th ed. 2017) ("There are many
cases -predominantly, but not exclusively, from the Third and Fifth Circuits-:-- holding that the
burden is on the objecting defendant to establish that venue is improper, because venue rules are
for the convenience and benefit of the defendant.").



Case
BRISTOL~MYERS SQUIBB COMPANY and PFIZER INC v, Mylan ["MPI"], 2017 U.S. Dist. LEXIS 146372 (11 Sept 2017)

See also Boston Scientific v. Cook, 2017 U.S. Dist. LEXIS 146126, also involving Heartland LLC v. Kraft Food Group Brands LLC, 137 S. Ct. 1514 (2017).

UPDATE.
There was a post on 13 Sept 17 Frequent ANDA Filer May Have Regular and Established Place of Business in Delaware​

IPBiz notes additional text in the decision, which relied on Acorda, 817 F3d. 755:


In the Court's view, the best, most reasonable conclusion after Acorda is that an ANDA filer's future, intended acts must be included as part of the "acts of infringement" analysis for purposes of determining if venue is proper under the patent venue statute. In Acorda, the Federal Circuit plainly held that intended, planned, future acts that will occur in a district in the future (after FDA approval) are acts that must be considered now in determining whether an ANDA filer has sufficient contacts with that district right now to make Hatch-Waxman litigation in such a district appropriate from a jurisdictional perspective. See, e.g., id. at 760 ("[T]he minimum-contacts standard is satisfied by the particular actions Mylan has already taken — its ANDA filings — for the purpose of engaging in that injury-causing and allegedly wrongful marketing conduct in Delaware."). It follows, in the Court's view, that the same approach must apply in the context of a venue analysis: planned, future acts that the ANDA filer will take in this District must be considered now in determining whether venue is proper here. In the context of Hatch-Waxman, therefore, such future acts are properly considered part of the "acts of infringement" that "the defendant has committed" within the meaning of § 1400(b).



The conclusion of the case:


For the reasons stated above, the Court will deny without prejudice MPI's motion to dismiss for improper venue. MPI has committed acts of infringement in Delaware based on its submission of an ANDA to the FDA, with the intention and for the purpose of selling products in Delaware that would allegedly infringe BMS' patents. The Court is not yet able to determine whether MPI lacks a regular and established place of business in Delaware. Hence, the Court will permit venue-related discovery and allow MPI to renew its venue challenge after such discovery is completed.