Delaware IP Law Blog

In one of his last acts as a district judge, now-Third Circuit Judge Kent A. Jordan last week issued a post-trial damages opinion in the Novozymes v. Genencor litigation. In its decision, the Court touched on a range of subjects, including questions of standing, willfulness, and permanent injunctive relief.

Subsidiary Standing. The Court recognized that, in the absence of direct evidence of an exclusive relationship, an otherwise nonexclusive licensee might have standing to pursue an infringement action. But where, as here, the license agreement contained a covenant not to sue and a grant of a "non-exclusive" license, the written agreement trumped any collateral evidence of an exclusive relationship.

Willful Infringement. The Court also found that Defendant Genencor willfully infringed Novozymes's patent by continuing to sell its competing product after receiving notice of allowance of Novozymes's claims.

"[N]ot only did Genencor continue to manufacture and sell Spezyme Ethyl, it also applied for its own patent claiming what appears to be, in essence, the same technology. Taken together, Genencor's behavior suggests that it deliberately continued to infringe Novozymes's claims on technology that Genencor itself believed was patentable." (slip op. at 31)

Genencor's decision to wait to pull its product from the market until after a decision in the first phase of trial also weighed on the Court's willfulness finding: "Genencor failed to exercise due care when it chose to continue making and selling the accused product until the end of the liability phase of this trial." (slip op. at 32)

Permanent Injunctive Relief. The Court also found that, because the parties are direct competitors, permanent injunctive relief is warranted.

"[T]he statutory right to exclude represents a benefit that, under these circumstances, cannot be equated by an award of cash. These are head-to-head competitors, and Novozymes has a right, granted by Congress, not to assist its rival with the use of proprietary technology." (slip op. at 37)

Interestingly, the Court noted that this legal-remedy analysis would apply regardless of whether Novozymes was awarded a reasonable royalty or lost profits.

<%media(20070221-05-160a.pdf|Novozymes A/S v. Genencor Int'l Inc.)%>, C.A. No. 05-160-KAJ (D. Del. Feb. 16, 2007) (Jordan, J.).

Two statements of note in a recent decision by Judge Jordan (<%media(20070124-Rocep - 05-141[1].pdf|Rocep Lusol Holdings Ltd. v. Permatex, Inc.)%>, C.A. No. 05-141 (D. Del. Jan. 19, 2007) (Jordan, J.):

- An inventor's testimony regarding the meaning of a piece of prior art will be given little or no consideration (as with claim construction) since the testimony is often self-serving. Id. at 12 n.5.

- Disclosing an element of a claim as an alternative embodiment in a piece of prior art rather than as the primary embodiment of the claim will not make a reference non-anticipating. Id. at 12 n.6.

The Court went on to grant the defendants' motion for summary judgment that the patent was invalid based on a PCT application filed by the inventor of the patent-in-suit.

<%media(20061219-phillips ii 02-123.pdf|Philips Electronics N.A. Corp. v. Compo Micro Tech, Inc., C.A. No. 02-123-KAJ (D. Del. Dec. 12, 2006).)%>

In a follow-up to an October 23, 2006 decision in the same case awarding attorneys� fees to Sullivan and Cromwell, Judge Jordan awarded Potter Anderson and Corroon LLP attorneys� fees in the amount of $66,764.90 for 312.90 hours of work during April 2004. Our write-up of the October decision is available here.

In the October opinion, the Court had asked for documentation to support the amount of fees requested by Potter Anderson. The case had involved multiple patents and multiple defendants, but the fee award only pertained to one defendant and one patent. As such, it was difficult for the attorneys to separate the fees associated with each patent and each defendant. To be conservative, Potter Anderson only submitted records to show the work they did in April 2004, the month of the trial against CMT, which involved one remaining patent. The Court ordered the payment of Potter Anderson�s fees by CMT, finding Potter�s seeking of fees during the month of trial �reasonable� �given the interrelationships of the technology of the two patents, and the degree to which the defendants were engaged in the litigation.� Op. at 6.

Reminder: a motion for reconsideration is not the tool for raising additional arguments, facts or issues you could have raised during initial briefing of an issue.

On October 26, 2006 Judge Jordan issued a claim construction opinion in <%media(20061122-Ampex claim construction 04-1373a.pdf|Ampex Corp. v. Eastman Kodak Co)%>., C.A. No. 04-1373. Ampex subsequently moved for reargument or reconsideration of the construction of one claim term. Specifically they argued that such relief was appropriate where they allege they did not have an opportunity to address whether the addition of a term was a "narrowing amendment that triggers a presumption of prosecution history estoppel." Ampex argued that they did not make that argument because defendant did not meet their burden of showing that a narrowing amendment had been made, in fact, they chose to assume the presumption was raised and argue that it was overcome. The Court in its opinion held that Ampex was on notice of the issue and had an opportunity to respond and its choice to not "focus its advocacy efforts on whether the amendment at issue was narrowing" does not mean they did not have the opportunity to contest whether the presumption was actually established. <%media(20061122-ampex - 11-20 reconsideration.pdf|Ampex Corp. v. Eastman Kodak Co)%>., C.A. No. 04-1373, slip op. at 3 (D. Del. Nov. 20, 2006) (Jordan, J.). Therefore, the Court denied the motion for reconsideration.

On a side note, the Court also held that prosecution history estoppel does apply to clarifying amendments, even where made under 35 U.S.C. Section 112, Paragraph 2. Id. at 5-6.

So remember to raise and anticipate all arguments and responses thereto.

<%media(20061106-Ampex - Nov 3.pdf|Ampex Corp. v. Eastman Kodak Co.)%>, C.A. No. 04-1373-KAJ (D. Del. Nov. 3, 2006).

Plaintiff Ampex Corp. moved the Court for partial summary judgment that the patent at issue was not invalid (a.k.a. valid) based on several combinations of prior art references. Ampex argued that the proponent of obviousness is required to present an element-by-element comparison of the claims to each prior art reference. The Court, however, found Kodak�s identification of the references in each combination and disclosure of the references� features believed to be relevant to the claim invention sufficient to survive a motion for summary judgment.

The drafting of jury instructions is an arduous task, but in a recent opinion, Judge Jordan's ruling makes carefully constructed jury instructions a must for purposes of appeal.

In <%media(20061103-Ampex Kodak (summary judgment prior art) (04-1373-KAJ).pdf|Ampex Corp. v. Eastman Kodak Co)%>., C.A. No. 04-1373 (D. Del. Nov. 2, 2006) (Jordan, J.), Ampex moved for summary judgment that certain pieces of prior art were not in fact "prior art."

The more interesting piece that they sought to preclude was a continuation-in-part patent of a parent application that was filed before the filing date of the patent-in-suit. (The filing date of the continuation-in-part was after the filing date of the patent-in-suit.) During the prosecution of the parent application the Examiner rejected certain claims as not enabled and the applicant responded, not by fixing the claims, but instead by arguing that one of ordinary skill in the art would find the disclosure enabling on this matter. When the Examiner continued his rejection, the applicant abandoned the application and filed a continuation-in-part. Now, in the pending litigation, Kodak is asserting that the prior art date for this patent is the filing date of the parent application because one of ordinary skill in the art would have found at least one issued claim enabled and has an expert to testify to such. (sound familiar?)

The question then becomes…can a defendant take a position that the applicant of the prior art patent abandoned? Definitely an interesting one, with far-reaching implications for invalidity cases. Unfortunately, the Court did not have to take a position one way or the other at this stage because it found a genuine issue of material fact existed sufficient enough for the prior art to go before the jury and therefore denied summary judgment.

The Court did note, however, that "should the completed record indicate that Defendants should not have been permitted to rely on this evidence," the parties should make sure to have a jury verdict form that "poses interrogatories with sufficient specificty to permit an understanding of whether a verdict of invalidity" turned on that disputed piece of prior art. Id. at 6. Once again, demonstrating the importance of carefully worded and detailed jury instructions.

Eastman Kodak Co. has prevailed in its defense of a competitor's accusations of infringement involving the company's digital-image technology. A day after denying the company's motion for summary judgment on inequitable conduct, the Delaware court issued an opinion granting Kodak's similar motion on non-infringment. <%media(20061101-Ampex2.pdf|Ampex Corp. v. Eastman Kodak Co., C.A. No. 04-1373-KAJ (D. Del. Oct. 31, 2006) (Jordan, J.).)%>

Ampex brought the infringement claim against Kodak seeking to protect its patented video and image processing technology. See U.S. Patent No. 4,821,121. The Court found that because Kodak's products altered the image data after capture, regardless of whether the image returned to its original state upon storage, the technology could not literally infringe the '121 patent's claims that required complete identity of pixel value at all stages of transmission and storage.

Moreover, because the patentee added the identity requirement in response to the examiner's initial doubts regarding indefiniteness, the Court held that a presumption of prosecution history estoppel applied. Because Ampex failed to rebut this presumption, there could be no infringement under the doctrine of equivalents.

The question now becomes: Will the Court ever reach the issue of validity, as did another Delaware judge facing a similar procedural posture?

<%media(20061031-Ampex Inequitable conduct SJ opinion.pdf|Ampex Corp. v. Eastman Kodak Co., C.A. No. 04-1373-KAJ (D. Del. Oct. 30, 2006))%>

In this decision, Judge Jordan denied both parties' cross-motions for summary judgment regarding inequitable conduct. The Court reasoned that because the materiality of the prior art references and the intent of the patentee are "hotly contested," summary judgment was inappropriate on the present record.

Judge Jordan went on in this opinion to make some general comments about motions for summary judgment. He stated: "Here, as sometimes happens, the parties have moved for summary judgment when it is plain that neither side can meet the requirements of Rule 56." <%media(20061031-Ampex Inequitable conduct SJ opinion.pdf|Op. at 3.)%> Describing the cross-motions as "meritless," Judge Jordan was perplexed that Ampex listed thirty-seven disputed issues of fact when opposing the other side's summary judgment motion, but then filed its own motion for summary judgment that there was no inequitable conduct. <%media(20061031-Ampex Inequitable conduct SJ opinion.pdf|Id. )%>

The lesson from this case is to make sure your arguments to the Court on an issue are consistent, if possible. In addition, litigants in Delaware should carefully decide whether to present arguments to the Court on summary judgment (especially in bench trials), for fear of losing the Court's confidence and agitating the Court.

Is there a limit to the number of claims a district court will construe? Yesterday, a Delaware District Judge issued a claim construction opinion addressing that question. The Court, faced with the prospect of interpreting ninety-nine claim terms, sua sponte limited the scope of its opinion:

While a general interest in the terms of the patent is understandable, I cannot, consistent with my judicial responsibilities, answer questions that may be of no more than academic interest. Therefore, I have endeavored to construe only those terms that, based on the papers submitted, appear to be dispositive of issues brought to my attention.

<%media(20061027-Ampex.pdf|Ampex Corp. v. Eastman Kodak Co., C.A. No. 04-1373-KAJ (D. Del. Oct. 26, 2006) (Jordan, J.), at 1 n.1.)%> Given the increased awareness of Federal Circuit reversal rates of multi-claim decisions, perhaps the Court's action is a signal to the bar - the less claims, the better.

<%media(20061026-Philips.pdf|Philips Electronics N.A. Corp. v. Compo Micro Tech, Inc.)%>, C.A. No. 02-123-KAJ (D. Del. Oct. 23, 2006)

Judge Kent Jordan granted Philips Electronics' request for $285,690.44 in costs and $2,448,750 in fees. After finding the case exceptional under § 285 in March 2005, the Court required Philips to submit documentation in support of its request for fees and costs. Philips' first submission, however, was inadequate in the Court's eyes, and the Court required Philips to submit further documentation to "support the total number of hours worked, when the hours were worked, and what was done by whom during those hours." <%media(20061026-Philips.pdf|Op. at 1)%>. The Court then granted the request for costs and fees after Philips� second submission. Philips was represented by Sullivan and Cromwell, and locally by Potter Anderson and Corroon.

Of particular interest in this case is the way that Sullivan and Cromwell broke down their fees between multiple patents and multiple defendants. In this regard, the Court approved of Sullivan�s narrowing of fees as described on pages 5 through 8 of the Order. The Court did not allow recovery of expert witness fees, ambiguous copying and scanning costs, or �miscellaneous� expenses. However, the Court did allow Sullivan and Cromwell to use the rates charged by other highly-regarded New York City firms when calculating a reasonable hourly rate, instead of using the rates charged by Delaware firms (which, incidentally, are a bargain!).

In case you were wondering, the billing records and timesheets submitted to the Court were done so under seal. Darn. But the Bill of Costs can be found <%media(20061026-philips bill of costs.pdf|here)%>.

Danish company Novozymes A/S scored a big victory recently in protecting its commercial enzymes used in the fuel-ethanol industry. Coming on the heels of an expedited bench trial, District Judge Kent A. Jordan issued a 64-page opinion finding that a competing product, manufactured by Genencor International, infringed a Novozymes patent granted in 2005. At issue were the parties' alpha-amylase enzymes - proteins that break down starches for use in ethanol fuel - and the effect deletions to their amino-acid sequences had on patentability and validity.

The Court concluded that Genencor's manipulation of the sequence mirrored Novozymes's similar efforts. A must read for those in or contemplating litigation in the areas of peptide sequencing and protein engineering. Stay tuned for the damages trial, which will occur this fall. Novozymes A/S v. Genencor International Inc., C.A. No. 05-160 (D. Del. Aug. 24, 2006) (Jordan, J.) <%media(20060929-Novozymes.pdf|[Read the opinion here].)%>