Different parties, different patents — transfer justified?

Posted In: Sue L. Robinson on April 21, 2008 By Karen E. Keller

In what Judge Robinson believed to be a first impression issue before her, she recently denied a motion to transfer where "neither the parties nor the patents" were identical. Cisco Systems Inc. v. GPNE Corp., C.A. No. 06-671-SLR, Memo. Order, at 5 (D. Del. Apr. 17, 2008). Defendant, GPNE, moved to transfer this declaratory judgment litigation to the Eastern District of Texas where they had earlier filed two patent infringement lawsuits. The first lawsuit in Texas was filed against one set of defendants and settled early on in the litigation. The second lawsuit was filed against another group of defendants and remains pending only against one defendant, and involves only one of the patents-in-suit that was asserted in the Delaware litigation but involved different technology. Id. at 2. (Neither Texas lawsuit involved the declaratory judgment plaintiffs who filed suit in Delaware.)

GPNE argued that once the Eastern District of Texas obtained "possession of the subject matter" of the dispute, the later-filed litigation should be subject to transfer under the "first-filed" rule. Id. Judge Robinson stated that she found "remarkable the assertion that a court obtains 'possession of a subject matter' of a patent as soon as a single case involving that patent is filed in that jurisdiction" and therefore denied the motion to transfer. Id. at 5.

A note for all those who may draft a motion to transfer before Judge Robinson in the future…"absent a truly regional defendant or critical witnesses that cannot be compelled to attend trial, Delaware (especially for a Delaware corporation…) is at least as convenient as any other forum."

For a copy of the opinion click here.

Licensor's Ephemeral Retention of Right to Sue Defeats Licensee's Standing

Posted In: Sue L. Robinson on March 12, 2008 By Andrew A. Lundgren

In weighing a patent licensee's standing to sue for infringement, Courts often look to whether the license is exclusive and conveys all substantial rights, including the privilege to sue. But what happens when the license in question apportions the litigation right between licensor and licensee? According to District of Delaware Judge Sue L. Robinson, the licensee alone has no standing to bring suit.

The contract in question required the licensee to notify the licensor of any third-party infringement. If the licensor did not file suit within ninety days, then the licensee would be free to initiate its own action against the third party. Therein lies the problem:

While the License clearly gives [licensor] the exclusive right to sue during the first 90-day period, there is no specific, reciprocal language giving [licensee] the exclusive right to sue after the first 90-day period.

Because the licensor failed to transfer "all substantial rights" in the patent, the licensee lacked standing to sue alone. Ultimately, however, the Court suggested a cure: add the licensor as a named plaintiff.

Siemens Medical Solutions USA Inc. v. Saint-Gobain Ceramics & Plastics Inc., C.A. No. 07-190-SLR (D. Del. March 7, 2008) (Robinson, J.).

Attorney Argument to PTO May Constitute Inequitable Conduct

Posted In: Sue L. Robinson on March 11, 2008 By Andrew A. Lundgren

In a recent memorandum order, District Judge Sue L. Robinson summarily rejected a request to jettison a party's inequitable conduct defense. Recognizing that "arguments made to the PTO can form the basis for inequitable conduct defenses under certain circumstances," the court denied a motion to dismiss without prejudice to renew.

At least at the motion to dismiss stage, the defendant's claim that attorney argument made to the examiner involved intentional falsehoods about a material reference must stand.

Elan Corp. v. Teva Pharma. USA Inc., C.A. No. 07-552-SLR (D. Del. March 7, 2008) (Robinson, J.).

Decision Clears Way for Four New Stent Cases to Go Forward

Posted In: Sue L. Robinson on January 29, 2008 By Karen E. Keller

In the ongoing battle between Boston Scientific Corporation, Johnson & Johnson Inc. and Cordis Corporation, the District of Delaware recently handed BSC a victory, allowing it to proceed in four declaratory judgment actions each seeking a judgment on invalidity on one of four patents related to drug-eluting coronary stent technology. Boston Scientific Corporation v. Johnson & Johnson Inc. and Cordis Corporation, C.A. Nos. 07-333-SLR, 07-348-SLR, 07-409-SLR, 07-765-SLR, Memo. Op. (D. Del. Jan. 24, 2008). BSC manufactures a private-labeled version of a stent manufactured by Abbott Laboratories. There are four lawsuits currently pending in the District of New Jersey where Johnson & Johnson asserts infringement of the same four patents at issue in the Delaware litigation, however, the defendant in those cases is Abbott Laboratories.

Johnson & Johnson moved to dismiss all four actions for failure to allege imminent harm necessary for declaratory judgment jurisdiction and also moved to transfer the four cases to the District of New Jersey where its earlier-filed cases are pending.

The Court found that J&J's Jekyll & Hyde jurisdictional argument was not enough to warrant dismissal of the actions. In the District of New Jersey actions, J&J accuses Abbott Laboratories' stent product (identical to that of BSC) of infringing the same patents-in-suit despite the fact that Abbott's product was pending launch in 2008 and was only pending FDA approval. In moving to dismiss the Delaware actions, J&J argued that there could not be declaratory judgment jurisdiction because BSC is not currently marketing or selling the stent (although it has announced its intention to start selling in 2008) and is still awaiting FDA approval. Judge Robinson stated that J&J "can not have it both ways" and therefore denied their motions to dismiss

The Court further denied J&J's motions to transfer the cases to the District of New Jersey where its four earlier filed cases against Abbott are pending. The Court found so, even though the actions pending in the D. N.J. involve the same patents, the same accused products and the same legal issues. Judge Robinson acknowledged that BSC need not have been a party to the earlier filed litigation for the "first-filed" rule to apply, however, in its discretion the prejudice to BSC should the action be transferred was too great. The New Jersey court has yet to set a trial date where the Delaware cases have a trial date and schedule in place so BSC will be able to proceed without delay on its claims. Judge Robinson found J&J's argument on the risk of inconsistent rulings on the legal issues to be "entirely speculative" at this time and therefore not persuasive for transfer. Applying the remainder of the Jumara factors, the Court found that the cases should remain in Delaware.

And the battle rages on…

Delaware Judge Examines, Then Defers, Separate Patentability Argument

Posted In: Sue L. Robinson on January 11, 2008 By Andrew A. Lundgren

An accused device infringes under the doctrine of equivalents when, among others, the alleged equivalent represents an "insubstantial" change from the claim language. Uncertainty arises, however, when the equivalent is itself patented. Would a finding of equivalence amount to a declaration that the patent covering the accused device is invalid? Perhaps to avoid this outcome, the Federal Circuit has held that a finding of equivalency in this scenario is "considerably more difficult to make out," albeit not necessarily foreclosed.

In a recent opinion, district judge Sue L. Robinson faced, and declined to wade into, this separate patentability issue in the preliminary-injunction context. Acknowledging that the equivalent's patented status is evidence that it was "previously unknown and/or non-obvious," and that customers in the field accepted the interchangeability of the compounds in issue, the Court nonetheless rejected the notion that plaintiff could show a likelihood of success on the merits.

According to the Court, defendant has a "strong argument" that, as a matter of law, the equivalent is both novel and substantially different from the asserted invention. "To the extent that 'known interchangeability' can coexist with separate patentability, plaintiff's burden on its preliminary injunction motion is a heightened one."

Perhaps the result would be different had this been an actual finding on the merits?

Siemens Medical Solutions USA Inc. v. Saint-Gobain Ceramics & Plastics Inc., C.A. No. 07-190-SLR (D. Del. Jan. 8, 2008) (Robinson, J.).

Judge Robinson Sanctions Violation of Model Rule 4.2

Posted In: Sue L. Robinson on December 21, 2007 By

Microsoft Corp. v. Alcatel Bus. Sys., C.A. No. 07-090 (D. Del. Dec. 18, 2007).

This case dealt with a violation of Model Rule of Professional Conduct 4.2 by two attorneys from a prominent national firm. The attorneys purchased, on the open market, an Alcatel Communications System that contained certain features at issue in the patent litigation. The system was installed at the attorneys' Washington D.C. offices, and one of the technicians working on the installation identified himself as an employee of Alcatel-Lucent, one of the originally-named defendants in the case. The employee helped install the system, trained the attorneys on how to use the system, and engaged in ongoing conversations with the attorneys about the administration, use, and configuration of the system. The Court noted that the employee was one of only a limited number of engineers at Alcatel with the experience and training to install the system.

Admitting Evidence of Commercial Success After KSR

Posted In: Sue L. Robinson on December 6, 2007 By Andrew A. Lundgren

As part of the "broad inquiry" into obviousness mandated by the Supreme Court in KSR v. Teleflex, commentators have speculated over the continuing viability of so-called "secondary considerations." Some commentators predict that such considerations are now "elevated in importance." Others question the rubric's continuing relevance, specifically pointing to the Federal Circuit's treatment of a case out of this district.

Given these doctrinal fluctuations, discerning the best proofs for an invalidity case may now be more difficult. One recent decision by Delaware district judge Sue L. Robinson, however, sheds light on one route to proving the secondary consideration of commercial success: news articles.

In its December 4th order, the Court held that a defendant's praise for the accused products, embodied in news articles, can be admitted as admissions of a party so long as the statements "relat[e] to the commercial success of the accused products." Other articles that simply mention the accused product, on the other hand, are inadmissible: it is the party's own statement of praise, not the existence of public information about the products, that controls the evidentiary inquiry.

Callaway Golf Co. v. Acushnet Co., C.A. No. 06-091-SLR (D. Del. Dec. 4, 2007) (Robinson, J.).

Declaratory-Judgment Plaintiff Not "True" Plaintiff Under First-Filed Rule

Posted In: Sue L. Robinson on November 30, 2007 By Andrew A. Lundgren

One party files an infringement action at 12:01 a.m. in New Jersey. Also at 12:01 a.m., the infringement defendant, precluded from lodging its Delaware declaratory-judgment action by a local rule requiring paper filing of complaints, files instead a motion to consolidate the forthcoming declaratory-judgment action with an earlier-filed action. Under the first-filed rule, which action came first, New Jersey or Delaware?

According to Delaware district judge Sue L. Robinson, the question is moot, as the infringement plaintiff's choice of forum should prevail:

"Even if J&J's 12:01 a.m. filing of the first New Jersey action were to be considered the functional equivalent of Abbott's 8:30 a.m. filing of the 07-259 action in this district (and the court declines to find a 'dead heat' in this instance), the winner of this race to the court house is the true plaintiff, not the declaratory judgment plaintiff, as this court respects the choices made by plaintiffs in choosing this state as a forum and must, therefore, respect their choice of a different forum."

In this case — an action "replete with inferences of forum shopping by both parties" — the orchestrated late-night maneuvering came to naught.

Abbott Labs. v. Johnson and Johnson Inc., C.A. Nos. 06-613, 07-259 (D. Del. November 28, 2007) (Robinson, J.).

Court finds PTO's findings with regard to contractual obligations not controlling

Posted In: Sue L. Robinson on November 29, 2007 By Karen E. Keller

Can a dispute resolution provision in a contract between two parties that states that "any dispute arising out of or relating to patents" shall be resolved through negotiations and mediation and should mediation fail to reach a result, either party may institute legal proceedings "but only in the United States District Court of Delaware, and no other" prohibit a party from filing a request for inter partes reexamination? The Court recently answered yes, despite a finding by the USPTO that such a provision is contrary to public policy and therefore the request for reexamination should be honored.

In Callaway Golf Company v. Acushnet Company, C.A. No. 06-091-SLR, Memo. Opinion (D. Del. Nov. 20, 2007), the defendant had entered into a prior settlement agreement with plaintiff's predecessor-in-interest to resolve certain patent claims. Id. at 3. This agreement contained the language described above. Following two attempts at resolving their dispute via mediation, the defendant filed an inter partes reexamination request for each patent at issue in the lawsuit and then plaintiff subsequently filed the instant lawsuit. Callaway Golf moved for summary judgment for breach of contract and Acushnet moved for summary judgment of no breach of contract.

As a threshold matter, the Court found that because the plaintiff, Callaway was a "successor" as defined by the Agreement and further because the parties had previously engaged in two mediations as required by the Agreement that both parties are bound to the terms of that contract. Id. at 24-25.

Callaway, in addition to its summary judgment motion had also filed a petition with the USPTO to vacate the reexamination that was filed by Acushnet based on the provisions in the Agreement. The PTO dismissed the petition for many reasons including that there was no authority for private parties to abrogate the PTO's statutory jurisdiction and that such a provision would be contrary to public policy. Id. at 26. Judge Robinson held that the Court "owes no deference to the PTO's interpretation of the legal effect of the Agreement or, more generally, the legality of a provision that purports to prevent parties from filing inter partes reexaminations' the PTO was clearly within its jurisdiction to dismiss plaintiff's request to halt the proceedings. It does not follow, however, that defendant was not in breach when it filed its inter partes reexamination request in the first instance." Id.

Ultimately, the Court found that because reexamination was not listed as a possible procedure for resolution of a dispute between the parties (only mediation and litigation in the D. Del. were), it is precluded as a possible remedy for any dispute involving the patents-at-issue. Id. at 27. The Court compares such a provision as "akin to a forum selection clause" as it does not effect either party's interest in adjudicating the validity of the patent it just requires them to do so before a Court instead of the PTO. Id. at 28. Finally, the Court finds that such a holding is not against public policy since: (1) the public is not a party to the Agreement and (2) any third party can still challenge the validity of the patents through a request for reexamination. Id. at 29.

Misrepresentations in Expert Report Lead to Exclusion of Evidence

Posted In: Sue L. Robinson on November 29, 2007 By Karen E. Keller

An expert witness represents in his expert report that he/she "personally directed" testing and that he/she "prepared and tested" the product when in fact the testing was actually done by personnel of the defendant — what happens with the evidence? Based on a recent ruling by Judge Robinson in Callaway Golf Company v. Acushnet Company, C.A. No. 06-091-SLR, Memo. Order (D. Del. Nov. 20, 2007), such evidence should be excluded.


In that case, the defendant submitted an expert report in support of its invalidity contentions in which the expert represented that he personally directed the preparation and testing of the products. At the deposition of that same expert, he testified that it was actually personnel of the defendant that directed the tests, and that he was not involved at all. The Court found that the expert report did not show any "personal knowledge of any material aspect of the subject matter and cannot be used to confer any indicia of trustworthiness to the test results." Id. at 2. Therefore the evidence of such testing was excluded.

"Claim Domination" and Double-Patenting

Posted In: Sue L. Robinson on November 6, 2007 By Andrew A. Lundgren

In the statutory double-patenting context, claim domination arises where one patent's claim reads on an invention defined by a more specific claim in another patent. The former dominates the latter because the narrow claim cannot be practiced without infringing the broader claim. Although domination is not per se double-patenting, the doctrine does have its boundaries: a patentee who disclosed ABCXY and claimed ABCX cannot later claim ABCXY beyond the expiration of the patent. This attempt at an extension constitutes double-patenting.

According to district judge Sue L. Robinson, any attempt to meld both tests impermissibly broadens the double-patenting inquiry. In the underlying litigation, the party asserting invalidity contended that double-patenting occurs where the earlier patent discloses and covers the subject matter claimed in the later patent and the evidence reflects that the patentee could have presented the new claims in the earlier prosecution. Or to put it another way: the claims dominate and the patentee already had a chance to claim additional subject matter.

The Court rejected this hybrid test, "unrecognized by any court," on two grounds. First, the test impermissibly adds a new element - opportunity - to the existing precedent, as "only the claims of the patent can be considered as support for a double-patenting rejection." And second, domination alone is insufficient to establish that the two claim sets are "patentably distinct":

[A stipulation that the new claims] cannot be practiced without infringing at least one claim of the [earlier patent] indicates that there is overlapping subject matter; this is not an admission that the sets of claims are not patentably distinct from one another."

Bayer AG v. Dr. Reddy's Labs. Ltd., C.A. No. 04-179-SLR, slip op. at 35-39 (D. Del. Oct. 25, 2007) (Robinson, J.) (quotation formatting altered from original).

Mapping Antitrust Remedies in the District of Delaware

Posted In: Sue L. Robinson on October 26, 2007 By Andrew A. Lundgren

Ever since the early seventeenth century, when Lord Coke condemned a playing-card patent for reducing those in the subject trade to "idleness and beggary," the judiciary has been charged with discerning the line between property rights and monopoly. So for patent practitioners, an antitrust decision, even if outside Title 35's domain, is worth noting. Delaware District Judge Sue L. Robinson recently issued such an opinion, providing authority on private antitrust remedies, personal jurisdiction, and venue.

The Court began by rejecting the assertion that an earlier finding of competitive harm in favor of the government necessarily meant that a later private plaintiff also established the requisite injury in the same market. According to the Court, this collateral estoppel argument "impermissibly combines the concepts of causation and injury." In the absence of proof of an injury in fact, there is no avenue by which the Court could "infer that a finding of anticompetitive effects necessarily implies a finding that consumers . . . have been hurt." Relatedly, the Court also questioned the need for a private injunction in addition to one the government had already obtained: "Clearly any [class member] can notify the government of any further antitrust violations by [defendant], regardless of the status of the instant private litigation."

Evaluating several personal-jurisdiction motions, the Court also rejected the claim that "personal jurisdiction in federal antitrust litigation is assessed on the basis of a defendant's aggregate contacts with the United States as a whole." Noting Third Circuit precedent, the Court held that the "national contacts" test applies only to foreign parties. The Court's grasp over a domestic entity is instead determined, as in most other cases, by "traditional long-arm jurisprudence." On the question of venue, however, the Court declined to apply the general venue statute, opting instead for the narrower antitrust provision: "[S]ection 12 of the Clayton Act may not be supplemented with the general venue provisions . . . for purposes of establishing venue for domestic defendants, and must be considered independently of those provisions."

Although the battleground may have now shifted to the Federal Rules of Civil Procedure, among others, the discourse on competition provoked by the Lord Chief Justice perseveres.

Howard Hess Dental Labs. Inc. v. Dentsply Int'l Inc., C.A. No. 99-255-SLR (D. Del. Sept. 26, 2007) (Robinson, J.)

See also Darcy v. Allein, (1603) 77 Eng. Rep. 1260 (K.B.).

The Battle Rages On…

Posted In: Sue L. Robinson on October 25, 2007 By Karen E. Keller

In the ongoing battle between Cordis Corporation and Boston Scientific Corporation over stent technology, the District of Delaware recently upheld two jury verdicts while denying Cordis' motion for judgment as a matter of law and motion for a new trial. Cordis Corp. v. Boston Scientific Corp., et al., C.A. Nos. 03-027-SLR, 03-283-SLR, Memorandum Order (D. Del. Sept. 24, 2007).

In June 2005, two separate juries found that various Cordis stents infringe certain claims of two BSC patents. (BSC was also found to infringe certain Cordis patents although this is not relevant to the pending motions and therefore I have not described it in detail.) While the District of Delaware case was pending, the inventor on one of the patents-in-suit filed a separate lawsuit in California relating to an assignment agreement with BSC over one of the patents. As part of that litigation, the California court was required to construe the claims of one of the patents. Cordis now argues that it is entitled to a judgment of non-infringement as a matter of law based on the claim construction argued by BSC in California and ultimately adopted by the court. Judge Robinson acknowledged that the court may revise its "interlocutory" claim construction ruling at any time prior to entry of judgment but refused to do so here. The Court noted that Cordis, significantly, failed to present this claim construction dispute to the the Court prior to this motion as critical to its non-infringement defense.

Cordis also moved for a new trial based on an announcement by the FDA over a year after the jury verdict which, Cordis argued, proved its one stent is "non-thrombogenic" and therefore could not infringe. The Court held that this FDA announcement was not conclusive and only identified a risk that could possibly be due to stent thrombosis. This "speculative" evidence was not enought ot dismiss the case or grant a new trial.

The battle continues…(but not for a while in these cases…as part of this order the Court ruled that it will not entertain any additional motions in these cases until the Federal Circuit issues its decision)

Delaware Judge Issues First Post-Bell Atlantic Pleading Decision in Patent Context

Posted In: Sue L. Robinson on August 3, 2007 By Andrew A. Lundgren

For the first time in the patent context, the District of Delaware has addressed the dismissal framework recently established in the Supreme Court's Bell Atlantic decision.

In a memorandum order issued yesterday, district judge Sue L. Robinson emphasized that although a complaint "does not need detailed factual allegations," the stated entitlement to relief requires "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Relying on both the fact that plaintiff had already successfully sought to amend its complaint and on plaintiff's declaration in response to the motion to dismiss, the Court found that plaintiff pleaded the requisite level of specificity to survive defendant's invalidity contention. The Court also rejected defendant's enforceability and "judge-shopping" rationales.

Beyond the pleading issue, the decision also contributes to the growing body of post-eBay injunction decisions. Addressing the irreparable harm element for preliminary injunctions, the Court definitively put to rest the question of whether, following a finding of likelihood of success on the merits, a presumption of irreparable harm should arise. Rejecting that analysis, the Court concluded that "such a presumption [does] not survive the Supreme Court's analysis in eBay. . . ." As a result, "it remains the moving party's burden to establish that monetary damages could not suffice."

Sun Optics v. FGX, C.A. No. 07-1347-SLR (D. Del. Aug. 2, 2007) (Robinson, J.).

Delaware Court Finds No Retroactive Effect for KSR Decision

Posted In: Sue L. Robinson on June 15, 2007 By Andrew A. Lundgren

Most commentators agree that the Supreme Court's recent KSR decision effectively broadened the federal courts' inquiry in determining obviousness. But how will this new paradigm affect pending litigation? Chief Judge Sue L. Robinson answered that question in part in a succinct memorandum order on Thursday. At trial, defendants asserted an invalidity defense based on obviousness. The jury disagreed and returned a verdict of infringement. Defendants then moved for judgment as a matter of law, but failed to attack the jury's nonobviousness finding. Herein lies the rub.

When KSR issued several months later, defendants moved for reconsideration of the verdict in light of the Supreme Court's repudiation of the so-called "teaching, suggestion, or motivation" test. The Delaware court declined to reopen the issue, stating that the "question of obviousness in this case was not open for review by this court when KSR issued." Only if the obviousness issue were "still open on direct review" would the Court re-examine the jury's finding in light of the new precedent.

In other words, to preserve the ability to move to reconsider, a party must have put the contested issue before the court in the first place. Relying on the jury's adverse finding alone is insufficient to trigger the retroactive application of new precedent.

Praxair v. ATMI, C.A. No. 03-1158-SLR (D. Del. June 14, 2007) (Robinson, C.J.)

Chief Judge Robinson Renders Two Patents Unenforceable Based On Inequitable Conduct

Posted In: Sue L. Robinson on June 14, 2007 By

Praxair, Inc. v. ATMI, Inc., C.A. No. 03-1158-SLR (D. Del. June 13, 2007).

In December 2005, a jury returned a verdict in favor of Praxair, finding two of its patents valid and infringed. A bench trial regarding inequitable conduct followed the jury trial. This opinion addresses the inequitable conduct issue.

Praxair asserted three references that were not disclosed to the PTO. The Court found only two of those references were sufficiently material to merit further consideration. Of these two remaining references, only one reference was found to have been intentionally withheld from the examiners of the two patents at issue. Interestingly, the court relied on the high materiality of the omitted reference and the "absence of any explanation for the nondisclosure" to infer an intent to deceive. Op. at 12. The Court found significant the facts that 1) Praxair was using the technology in the omitted reference in its own products for several years before filing the patent applications, and 2) one of the inventors built devices that utilized the technology in the omitted reference. Op. at 12, fn 9.

Moral of the story: If you are a patent prosecutor, this is the type of decision that might make you lose sleep. You ask the inventors to turn over any potentially relevant prior art, but do your words go in one ear and out the other? Maybe the take away is for patent attorneys to put their requests to inventors in writing (if you don't already) – just in case.

Can Tort of Infringement Learn from Its Common Law Predecessors?

Posted In: Sue L. Robinson on May 17, 2007 By Andrew A. Lundgren

In an opinion filed Tuesday, Chief Judge Robinson addressed whether a plaintiff may maintain an action for conversion of property (here, a virus strain) that plaintiff possessed only in copy form. Answering no, the Court found that "conversion cannot lie in the absence of the physical possession of the actual good or chattel owned by the plaintiff."

Thus, "[e]ven if the law supports the proposition that the physical possession of copies of a chattel may be a basis for conversion, the court has found no cases where the chattel sought to be returned was never in the actual possession of the alleged owner."

Because plaintiff possessed stock of the same strain, but not the identical sample, of defendant's strain, plaintiff did not have "physical possession" of the property, and therefore could not pursue its conversion claim.

While the Court rested its decision on grounds beyond the copying issue, its discussion of "physical" and "actual" possession in the context of copies is notable in light of the Supreme Court's recent Microsoft Corp. v. AT&T Corp. decision, which also addressed the issue of liability in tort for duplication of property. Although there are differences (most notably the echoes of international comity running throughout the Supreme Court's opinion), the two cases raise the question of how far liability should extend to products that are easily copied and modified as a matter of course in the relevant field.

In terms of judicial development, the ancient action for conversion has a leg up on the "new" statutory tort of infringement. The Delaware Court reaffirmed the common law principle that possessing the chattel in question is a prerequisite to relief. Perhaps the Supreme Court, in wading through the contours of infringement and its applicability to copies, also gave a nod to this common law possession rule.

Bavarian Nordic A/S v. Acambis Inc., C.A. No. 05-614-SLR (May 15, 2007) (Robinson, C.J.)

Injunctions Pending Appeal - Not Without Solid Evidence of Harm

Posted In: Sue L. Robinson on April 25, 2007 By

<%media(20070425-IMX - 4-24-07.pdf|IMX, Inc. v. Lendingtree, LLC, C.A. No. 03-1067-SLR (D. Del. Apr. 25, 2007). )%>

IMX filed a motion for reconsideration of the Court's previous denial of a permanent injunction pending appeal. As grounds for reconsideration, IMX cited an attempted post-verdict workaround by Lendingtree and design work that preceded the workaround as "ongoing, infringing conduct." Op. at 2. The Court saw the use of this new evidence as grounds for reconsideration as "nonsensical" because a workaround implies that Lendingtree has found a noninfringing alternative rather than a new infringing method. More likely, IMX used this "new evidence" as a way to make its assertion of new case law (a series of district court opinions according to the opinion) to the Court more palatable. Nonetheless, the Court examined the cases cited by IMX and distinguished them on their facts. Of particular concern to the Court was IMX's lack of evidence that either it or the public would be harmed without an injunction pending appeal. Id. at 3-4. Due to Lendingtree's admission that they continued infringing conduct until September of 2006, some nine months after the jury's verdict against Lendingtree, the Court ordered that Lendingtree produce an accounting of their continued infringement to the Court so that the Court may modify the damages award.

Interestingly, this issue of stays pending appeal was dealt with in summary fashion by the Federal Circuit yesterday in the Verizon v. Vonage patent dispute over VoIP internet telephony. The Eastern District of Virginia had granted Verizon's request for an injunction barring Vonage from signing up new customers during the pendency of Vonage's appeal to the Federal Circuit. Vonage argued to the Federal Circuit that the status quo could only be preserved by allowing Vonage to sign up new customers during the appeal. In addition, Vonage noted that district courts are overturned on their claim constructions about 40% of the time (I've seen higher numbers, but 40% is reasonable). Since Vonage was arguing on appeal that the claim construction was incorrect, and, statistically, it had a 40% chance of winning, Vonage asserted the unfairness of permanently damaging its business where it had decent odds of winning on appeal. The Federal Circuit issued a permanent stay of the injunction pending appeal of the claim construction.


Chad�s Editorial Take:

Both of these decisions raise interesting questions about the fairness of entering judgment against adjudged infringers before the Federal Circuit has had the final say on claim construction. Here�s my take: as long as the Federal Circuit (and the Supreme Court by not overturning them) insists on a de novo standard of review for patent claim construction, it makes little sense to grant injunctions pending appeal against accused infringers at the district court level. I know that this stance could hurt patentees that have rightfully prevailed, but the posting of bond could help alleviate this concern. As in the criminal context, I think it is more important to protect the adjudged infringer that ultimately may be found innocent than it is to reward the patentee with immediate gratification for prevailing at the district court level. Ultimately, I think the de novo standard of review must be changed because the district courts are clearly in a better position to construe the patent�s claims than an appeals court working with only a paper record. Until that happens, however, the reality will remain that your success at the Federal Circuit on claim construction is determined as much by the composition of the panel as by the arguments made by the parties on appeal.