Delaware IP Law Blog

CIF Licensing brought a lawsuit for patent infringement in the Eastern District of Texas against various defendants. One defendant, Remy International, moved to dismiss for lack of personal jurisdiction arguing that it was only a corporate "shell" and that its subsidiaries were the proper defendants. Subsequently, the Remy subsidiaries filed a declaratory judgment action in this District. Following that complaint, CIF amended its original complaint in Texas to join the proper subsidiary defendants and the Texas court stayed the action pending resolution of the "first-filed" issue by the District of Delaware. Remy Inc. v. CIF Licensing, LLC, C.A. No. 06-785-GMS/MPT, Memo. Order, at 2 (D. Del. June 9, 2008). Of note is the fact that the Delaware action had named potential suppliers and indemnitors as third-party defendants or defendants (who were not named in the Texas action).

Magistrate Thynge found that the relation back doctrine allowed CIF to properly add the subsidiary defendants to its Texas complaint and the Texas case was in fact, the first-filed. The court was not persuaded to depart from the first-filed rule simply because the indemnity claims were only found in the Delaware lawsuit, particularly where in a district such as this, great weight is given to plaintiff's choice of forum. Id. at 8-9.

For a copy of the opinion, see here.

Last year, the Federal Circuit affirmed former District of Delaware Judge Kent A. Jordan's decision in Microstrategy Inc. v. Crystal Decisions, Inc. d/b/a Business Objects Americas which granted partial summary judgment in favor of Business Objects America on invalidity of two of Microstrategy's patents and summary judgment as to non-infringement of a third Microstrategy patent. (See earlier Delaware IP Law Blog posting, June 27, 2007.) Business Objects subsequently filed a motion for its attorney fees and expenses pursuant to 35 U.S.C. Section 285 and the Court granted this motion, in part, on March 25, 2008. Microstrategy Inc. v. Crystal Decisions, Inc. d/b/a Business Objects Americas, C.A. No. 03-1124-MPT, Memo. Op. (D. Del. March 25, 2008). Magistrate Thynge stressed over and over again in her opinion that Microstrategy's "failure to produce" any evidence contrary to Business Objects' evidence as to anticipation on one patent-in-suit was critical to the finding of fees. Id. at 6-7. The Court stated that Microstrategy was "clearly aware" of the prior art and the fact that it would make any claim of infringement unjustified and yet "failed to reassess the merit of its claims". Id. at 8. These two things together established the "manifestly unreasonable" conduct necessary for a finding of fees. Id. at 8.

On February 1, 2008, Mary Pat Thynge was reappointed as a full-time magistrate judge for the District Court of the District of Delaware. The order states that her new eight-year term will begin on June 17. Until last August, Magistrate Thynge was the district's only magistrate and many patent litigators will know her for her reputation in successfully mediating patent cases. Last August, she was joined by Magistrate Leonard P. Stark

See a copy of the order here: Magistrate Thynge Reappointment Order

Of note, our colleague, Monté T. Squire of Young Conaway Stargatt & Taylor was appointed to the Merit Selection Panel which was charged with reviewing the Magistrate's prior service, receiving and reviewing comments from the Bar and public and making a recommendation to the Court regarding the Magistrate's reappointment.

For a copy of Mr. Squire's biography

In the case Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. January 22, 2008), Cordance Corp. has alleged that Amazon's trademarked "1-click" technology infringes its patent covering i-name technology. Amazon.com filed a declaratory judgment counterclaim alleging that Cordance's promotion of the i-name services infringes its patent covering software realted to personal address books. Cordance moved to dismiss this counterclaim and the Court subsequently denied the motion. See also posting on 12/04/07: Another "Case or Controversy" Decision Post- "MedImmune". This opinion addresses Cordance's motion for reconsideration and motion for leave to file a reply memorandum including a motion for Fed. R. Civ. P. 11(c) sanctions. Id. at 1.

The Court found that unlike the cases where there is a covenant not to sue and the patent holder abandons the infringement allegations, Amazon is not abandoning its claims here. Furthermore, Cordance has not stopped or agreed to stop all allegedly infringing activities. To divest the Court of declaratory judgment jurisdiction, the Court implies that the cessation of all potentially infringing activities either direct or indirect must be shown. Id. at 5.

Magistrate Judge Thynge further noted that Cordance's attempts in its motion to engage in the court in a facutal and legal analysis of Amazon's counterclaims would not succeed and that her analysis would stick to the issues at hand. Id. at 5.

On December 21, 2007, Magistrate Thynge granted summary judgment to Reexam Beverage Co. finding that two claims of US Patent No. 5,697,242 were infringed. Crown Packaging Tech. Inc. v. Reexam Beverage Can Co., C.A. No. 05-608-MPT, Memo. Order (D. Del. Dec. 21, 2007). The patent-at-issue involved methods for "reforming the bottom of a can body or can base" to make the can stronger while using less metal. Id. at 3. The Court found that Crown's technical drawings, physical can samples and testimony of its witnesses demonstrated infringement of two claims of the patent-in-suit.

Commissariat a l'Energie Atomique v. Samsung Electronics Co., et al., C.A. No. 03-484-MPT (D. Del. Oct. 31 and Nov. 2, 2007).

On October 31st and November 2nd, Magistrate Judge Thynge issued a series of four opinions in the above case. This case is a patent dispute involving the design and manufacture of liquid crystal displays. In particular, the claims relate to increasing the viewing angle of LCD display panels (like the one on your holiday shopping list). I will address each opinion in turn.

The first opinion denied in part and granted in part Samsung's motion for summary judgment that claims of the '412 patent at issue are anticipated by a European patent publication. Before comparing the claims at issue and the disclosure of the European reference, the Court noted that 'the fact that the examiner may have considered EP '775 [the European publication] during prosecution is not dispositive of Samsung's motion.' Op. at 7. The Court then noted that 'whether a reference 'teaches away' from the invention is inapplicable to an anticipation analysis.' Op. at 9 (citing 150 F.3d 1354, 1361). Thus, the fact that the European reference disparages the invention after disclosing it is not dispositive. Finally, the Court compares the claims at issue to the European reference and concludes that two of the three claims are anticipated.

The second opinion dealt with Samsung's motion for summary judgment that the '028 patent failed to disclose the best mode of performing the invention. Samsung argued that a particular polarizer, a model by Sanritz, was known by the inventors to be the best polarizer to carry out their invention, and the inventors concealed this polarizer by not disclosing it in the patent application such that a person of ordinary skill in the art would not be enabled to practice the invention. After determining that the relevant date of inquiry concerning the inventor's subjective belief as to the best mode of carrying out the invention is the earliest priority date claimed in the patent, the Court found Samsung had presented clear and convincing evidence that the Sanritz polarizer was the best mode of carrying out part of the claimed means and that the inventors had indeed concealed the best mode by not disclosing it in the application. Interestingly, the Court held that the trade name of the polarizer, Sanritz, 'was necessary for a skilled artisan to practice the best mode of the claimed invention' and, therefore, the trade name should have been disclosed. Op. at 8. Thus, the Court invalidated the '028 patent.

The third opinion dealt with the parties' cross motions for summary judgment of infringement and noninfringement of the claims remaining at issue after the decisions discussed above, claims 3-5 and 12. As to claims 3-5 of the '412 patent, both parties lost their summary judgment motions on literal infringement. As to infringement under the doctrine of equivalents, however, the Court found that CEA's conclusory statements were insufficient as a matter of law. Thus, the Court granted Samsung's motion for summary judgment of noninfringement as to infringement under the DOE. The Court further bolstered this decision in the alternative by holding that applying the DOE to the 'uniaxial medium' claim term as requested by CEA would vitiate the term under the all elements rule. Both parties lost their summary judgment motions as to claim 12 of the '412 patent. Finally, the Court addressed CEA's motion for summary judgment of inducement of infringement. As to this motion, the Court held that '[a]lthough intent may be proven by circumstantial evidence, when a plaintiff introduces circumstantial evidence that allows for inferences to be drawn, it is 'up to the jury to decide whether or not to draw any inference and to consider the weight of any such evidence.' 'Op. at 18 (citing 471 F.3d 1293, 1306). Since circumstantial evidence was presented as to intent, the Court denied the summary judgment motion, allowing the issue to proceed to the jury.

The fourth and final opinion dealt with Samsung's summary judgment motion that claims 3-5 of the '412 patent were anticipated under 102(b) by a single prior art reference. The Court denied the motion because there were multiple questions of fact as to whether certain claim elements were disclosed in the reference. One practical point was noted by the Court on page 7 of the opinion: make sure to explain how the language you quote in a reference discloses the corresponding claim element in your claim chart. In this case, the Court was unwilling to guess as to how/whether the quoted language disclosed the claim element. Completing the thought for the reader is almost always preferable to leaving the reader to complete the thought for themselves.

The District Court recently held that evidence of "marketing products or services and entering into licensing agreements" is enough to support declaratory judgment jurisdiction. Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. Nov. 20, 2007). This is true even where there is no allegedly infringing product or service currently on the market and where there was no threatened litigation or request to cease and desist. Following the Supreme Court's holding in MedImmune which rejected the requirement of "reasonable apprehension", the Court found that the counterclaim defendant's advertising and promoting of a service that was expected to be introduced, development of the architecture used by other companies to allegedly infringe the patent and receiving licensing fees related to the allegedly infringing service was enough to create a "case or controversy" sufficient for the Court to have jurisdiction. Id. at 7.

In a separate argument, the counterclaim defendant asserted that Amazon's counterclaim was vague and failed to state a claim because it did not "sufficiently identify which products allegedly infringe." Id. at 5. The Court found that Amazon did not need to identify specific products by name, "so long as they are sufficiently described in some way." Id. at 8.

Magistrate Judge Mary Pat Thynge recently broadened the Court's discovery-dispute procedure. As of October 22, all discovery matters, rather than "disputes," must follow the letter-briefing schedule set out in the Court's revised form scheduling order). As demonstrated in a recent order, requests for extensions of discovery deadlines fall within the definition of "discovery matters," and therefore must adhere to the Court's guidelines.

Roquette Freres v. SPI Pharma Inc., C.A. No. 06-540-*** (D. Del. Oct. 17, 2007) (Thynge, M.J.).

Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (D. Del. Oct. 5, 2007).

In this chapter of the beverage can patent dispute between the parties, Magistrate Judge Thynge denied Crown's motion for summary judgment of patent invalidity. Crown argued that certain asserted claims are invalid under § 102(g)(2) by a prior process practiced by the Ball Corporation. Rexam argued that the Ball process was not prior art because the claims at issue claim priority from a PCT application with a priority date predating the reduction to practice of the Ball process. (Still with me? If not, re-read the last sentence.) Each side's respective experts disagreed (imagine that!) over whether one of ordinary skill in the art would understand the PCT application to inherently disclose "radial movement of the reforming roller," a limitation present in the asserted claims. If the "radial movement" limitation is not found (either expressly or inherently) in the PCT application, then the patentee cannot rely on the PCT application's priority date. Due to this disagreement between the experts about whether a person of ordinary skill in the art would understand the PCT application to inherently disclose the "radial movement," the Court denied the motion for summary judgment.

In the late 1990s, a New York district court recognized the foreign "patent-agent privilege," which provides that "if a communication with a foreign patent agent involves a foreign patent application, then as a matter of comity, the law of that foreign country is considered regarding whether that law provides a privilege comparable to the attorney/client privilege." Nearly ten years later, the District of Delaware faced a similar question: whether, under French law, the patent-agent privilege is broad enough to extend to a special category of French patent agents.

Answering no, Magistrate Judge Thynge settled one of the rarer privilege disputes in this district.

In the underlying case, Defendant Samsung sought communications between Plaintiff CEA and the French patent agents that assisted CEA in prosecuting several French patents related to the patents-in-suit. Raising the patent-agent privilege, CEA opposed, claiming that its patent agents were entitled to assert privilege under a French professional-association regulation. When Samsung countered that a 2004 statute enacted by the French Parliament mooted the 2002 regulation, and therefore removed the agents' ability to assert privilege, the Court faced the task of engaging in French statutory interpretation. Ultimately, the Court sided with Samsung: "CEA's argument requires the court read into the 2004 statute an exception, the effect of which would be to modify the 2004 statute by the prior decree."

The result? The patent-agent privilege does not apply in this context and the French documents must be produced. The question of whether the foreign patent-agent privilege can be successfully asserted in this district must therefore wait another day.

Commissariat A L'Energie Atomique v. Samsung, C.A. No. 03-484-MPT (D. Del. Oct. 16, 2007) (Thynge, M.J.).

Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (D. Del. Aug. 28, 2007).

Crown moved the Court to reconsider its previous decision not to bifurcate plaintiff's infringement claims from defendant's infringement claims. In support of its motion, Crown cited two not-previously-cited cases from this district where the Court had bifurcated plaintiff's and defendant's claims of infringement. The Court reminded Crown that it "should have brought those cases to the Court's attention during the briefing of its motion to bifurcate" because "it is not proper on a motion for reargument for a party to digest the court's analysis of the cases cited during briefing and then seek to find other cases (which could have been previously cited) to present to the court…" Op. at 4. The Court also noted that Crown was attempting to shift its arguments – Crown had originally argued for complete bifurcation of the plaintiff's and defendant's cases, while in its motion for reconsideration Crown argued for a two-phase trial with one jury (addressing the Court's concerns about impaneling two juries and the extra time needed for two separate trials). Op. at 5.

Takeaway: In arguing for bifurcation, it may help to make a showing that the Court can accomplish the bifurcated proceedings in the time originally allocated for the combined proceedings.

Is a single jury equipped to consider competing expert testimony on reasonable royalty damages? Thankfully, a District of Delaware judge has answered in the affirmative. Much has been made in recent years about the American jury's ability to comprehend, digest, and assess the evidence in complex civil litigation, most notably in patent cases. By denying a plaintiff's motion to bifurcate, Magistrate Thynge has implicitly reaffirmed the vitality of the lay factfinder's role in patent litigation.

The Court rejected, among other reasons, plaintiff's claims of "jury incompetence" on the issue of reasonable royalty damages. By doing so, the Court noted plaintiff's curious argument: "Crown offer[ed] that its experts have calculated a different royalty rate than [defendant's experts], and therefore, Crown would be prejudiced by the introduction of [defendant's] evidence on that issue." Declining to accept plaintiff's protestations that one jury could not undertake such a "monumental task," the Court denied the request for bifurcation.

In a world awash with proposals for specialized patent courts and other devices foreign to the common law, it is reassuring to know that the institution of the jury, a staple of all civil litigation, no matter how complex, retains the confidence of the judicial branch.

Crown Packaging Tech. Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (July 24, 2007) (Thynge, M.J.).

In the recent Time Warner Cable, Inc. v. GPNE Corp. decision by the District of Delaware, Magistrate Judge Thynge found that Third Circuit law does not "specifically require the exact identity of the parties" when applying the first-to-file rule. C.A. No. 07-67-MPT, Memorandum Op. (D. Del. July 20, 2007). In Time Warner, the defendant, GPNE, had originally filed a patent infringement case in the Eastern District of Texas against Time Warner, Inc. and various other parties. Two days later, Time Warner Cable, Inc. filed a declaratory judgment action in the District of Delaware of non-infringement and invalidity of the patent that was asserted in the Texas litigation. The basis for declaratory judgment jurisdiction as alleged by Time Warner Cable, Inc. was that GPNE intended to include it in the Texas litigation as a defendant and therefore that would impact its business activities. Time Warner Cable, Inc. and Time Warner, Inc. are two separate entities (with Time Warner, Inc. owning 84% of Time Warner Cable, Inc.). Id. at 4. Subsequently, GPNE did amend its complaint in the Texas litigation to include Time Warner Cable as a defendant and moved to transfer the Delaware case to Texas.

The Court found that chronologically, GPNE was the "first-to-file" and because the Delaware case involves the same facts and the same patent the first-to-file rule will apply, despite the fact that Time Warner Cable was not originally a party to that first-filed action. Therefore, the Delaware case was dismissed and GPNE's motion to transfer or stay was denied as moot.

In dicta, the Court made some interesting notes on forum shopping. Time Warner Cable had alleged that GPNE's filing of the Texas action was forum shopping because it is a favorable jurisdiction for plaintiffs. The Court found no evidence that GPNE chose to litigate in Texas in "bad faith". Id. at 10. The Court did, however, note that Time Warner Cable, Inc.'s decision to file suit in Delaware could be considered an example of forum shopping because it was filed in anticipation of them being added as a defendant to the Texas litigation.

Once again it just proves the old adage…timing is everything…

Magistrate Judge Thynge issued an interesting decision last week that detailed the intersection of patent litigation and the arbitration of commercial disputes. Plaintiff Digene brought an infringement action against one defendant and later added inducement and tortious interference claims against another, Co-Defendant Beckman. The Court stayed the patent case and ordered "all" of Digene's claims against Beckman to arbitration. Following the arbitrator's favorable interpretation of a prior licensing agreement between the parties, Beckman sought to dismiss the inducement and interference claims on res judicata grounds.

The Court agreed that Digene had the opportunity to litigate its commercial and inducement claims before the arbitrator: "In light of Beckman's license under the [agreements], whether it induced infringement . . . by its relationship with Ventana was dependent upon the interpretation of the [agreements between the parties]. Further, because of Beckman's rights under the [agreements], whether it could tortiously interfere with Digene's potential business opportunities also hinged upon the same agreements . . . ."

As a result, Digene's attempts to continue the litigation following the arbitrator's decision could not proceed: "[Digene's claims] have already been evaluated twice by two different forums between the same parties and Digene, in essence, is asking for a third opportunity."

The Court's rationale highlights the importance of avoiding, when dealing with multiple claims of varying subject matter, the prospect of this type of arbitration estoppel.

Digene v. Ventana Medical Systems, C.A. No. 01-752-MPT (D. Del. June 12, 2007) (Thynge, M.J.).

On May 17, 2007, Judge Thynge issued a claim construction opinion in Crown Packaging Technology, Inc. and Crown Crok & Seal USA, Inc. v. Rexam Beverage Can Co. C.A. No. 05-608-MPT, Memorandum Order (D. Del. May 17, 2007). Consistent with Phillips v. AWH Corp, 415 F.3d 1303 (Fed. Cir. 2005), the court construed various claim terms set forth in both parties' patents related to beverage can technology.

A frequent issue that arises in patent litigation is how to secure the testimony of inventors who are no longer employed by the plaintiff (or defendant in a declaratory judgment action). This issue becomes even more complicated when the inventors do not reside in the United States. The language of any assignment agreement is often outcome-determinative, as was the case in Amgen, Inc., et al. v. Ariad Pharmaceuticals, Inc., et al. C.A. No. 06-259, Memorandum Order (D. Del. May 14, 2007) (Thynge, J.).

Amgen in its declaratory judgment action against Ariad moved to compel the deposition of 3 (of 13 total) inventors on the patent-in-suit whom Ariad refused to produce. These three inventors were all located overseas and were no longer employed by the defendants, however, all three executed assignment agreements. The assignment provided, in relevant part, that they would: "…perform any other lawful acts which may be deemed necessary to secure fully the aforesaid invention to said ASSIGNEE…including the execution of applications for patents in foreign countries, and the execution of substitution, reissue, divisional or continuation applications and preliminary or other statements and the giving of testimony in any interference or other proceeding in which said invention or any application or patent directed thereto may be involved." Id. at 2.

Ariad opposed the deposition request because none of the inventors were ever employed by or affiliated with them, there were ten other inventors that were available for deposition and the language of the assignment was only related to perfecting title of the invention and did not require them to assist in infringement or declaratory judgment actions. Id. at 3.

The Court found that unlike the language in the assignment found in Minebea Co., LTD, et al. v. Papst, et al. , 370 F. Supp. 2d 302, 308 (D.D.C. 2005) ("to render such assistance…as may be necessary to perfect title to the…Patent Rights."), there was no mention in the current assignment of perfecting title and the assignment was further not limited to assisting in prosecuting patent applications. This assignment agreement specifically required the inventors to "secure fully the invention" and testify in any legal proceedings involving the invention or patent for that invention and therefore the Court required Ariad to produce the three inventors in the U.S. for deposition at Amgen's cost. Id. at 5, 6.

Ariad's argument that ten other inventors on the patent-in-suit were available for deposition also did not persuade the Court otherwise. The Court found that each inventor's contribution to this patent that "addresses complicated bioscience" is relevant. Furthermore, the Court noted, ARIAD had produced two of these inventors in other litigation surrounding the same patent. Id. at 6.

A note to practitioners: be mindful of any time elapsing before filing a motion for preliminary injunction as it could be a reason for denying the relief. On May 9, 2007, Magistrate Judge Thynge issued an opinion in the case of Digene Corporation v. Ventana Medical Systems, Inc. and Beckman Coulter, Inc. denying plaintiff's request for preliminary injunctive relief for lack of showing irreparable harm or likelihood of success on the merits. C.A. No. 01-752 (D. Del. May 9, 2007) (Thynge, J.). Digene sought to enjoin defendant Ventana from making, using, selling or offering to sell reagents that contain HPV35, a human papillomavirus. This motion was filed 58 months from the date the initial complaint was filed and 30 months after, if one were to subtract the stay that was in place while Digene and Beckman Coulter engaged in arbitration proceedings before the International Centre for Dispute Resolution. The Court noted that "delay in seeking a preliminary injunction is a significant factor bearing on the need for it." Id. at 15. There was no "plausible explanation" in the record as to why Digene waited such a long period of time to file its motion. Id. In fact, Digene had filed a motion in 2003 seeking a more limited injunction to prevent Ventana from entering into a deal with third parties yet did not address any of the irreparable harm in that motion that it now claims to be suffering from. Id. Delay, the Court stated, "for a significant period of time before seeking a preliminary injunction intimates that the status quo is not causing irreparable harm." Id. at 16.

The Court further found that Digene's argument that Ventana was causing a possible loss of customer relations or