Delaware IP Law Blog

Earlier this year, we reported on a licensee-standing decision by Magistrate Judge Leonard P. Stark. In that decision, the Magistrate Judge recommended that a licensee operating under an agreement subject to "pre-existing nonexclusive licenses" could nonetheless pursue litigation as an exclusive licensee. In a recent order, District Judge Sue L. Robinson has, for the most part, adopted that report.

In recognizing the licensee's standing to sue, however, the Court made explicit its thoughts on determining exclusivity:

"Defendant argues that the intent of the parties is not dispositive. I agree. Intent is but one factor a court looks to in determining whether a license agreement confers to the licensee a legally protected interest in the patent. The license at issue is an expression of plaintiffs' intent to grant . . . an exclusive license . . . ; therefore it is a factor that weighs in favor of finding standing."

Accordingly, it is the "entire license agreement," not just the parties' characterizations, that controls the inquiry.

TV Guide On-Line Inc. v. Tribune Media Services Inc., C.A. No. 05-725-SLR/LPS (D. Del. Sept. 30, 2008) (Robinson, J.).

In a somewhat unusual procedural posture, Defendants moved the district court for attorneys' fees following a stipulated judgment of non-infringement after Judge Farnan issued his Markman Order construing the terms in favor of defendants. Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008). After the Federal Circuit affirmed Judge Farnan's Markman Order, defendants moved pursuant to 35 U.S.C. 285 to declare this matter an exceptional case and award defendants their attorneys' fees. Though admitting that the plaintiff could have done a "more thorough" pre-suit investigation, the Court found that the claim chart and analysis done by the plaintiff was "adequate to support its claims." Id. at 6. Judge Farnan also found that the plaintiffs' reasonableness in continuing to pursue the litigation was supported by its conduct, particularly its withdrawal of the infringement claims once it knew it could not support its claims under the Court's claim construction. Id. at 8. The Court therefore, found that defendants did not establish that this was an exceptional case.

Prism Technologies LLC v. Verisign, Inc., C.A. No. 05-214-JJF, Memorandum Opinion (D. Del. Sept. 30, 2008).

District Judge Sue L. Robinson has modified a recent damages order, reported by us last month, that accounted for the award's tax treatment:

"It is apparent from the papers submitted that the appropriate method of calculating prejudgment interest based on after-tax damages is fraught with opportunities for mischief. Indeed, each party has employed a different analysis in computing this aspect of the damages award. Under the circumstances, the court has determined that its attempt to adjust for taxes was ill conceived and, therefore, will adopt Cordis' computation of prejudgment interest, which (according to Medtronic) is consistent with a pre-tax assessment."

Cordis Corp. v. Medtronic Vascular Inc., C.A. No. 97-550-SLR (D. Del. Sept. 30, 2008) (Robinson, J.).

That willfulness is not properly a part of a Hatch-Waxman case is not a controversial proposition anymore. In a recent opinion, District Judge Joseph J. Farnan Jr. reaffirmed a long line of cases that jettisoned willful infringement allegations grounded solely on ANDA filings.

An interesting aspect of the decision, however, is its procedural posture: defendant chose to employ the the pre-answer motion to strike under FRCP 12(f). By granting this type of "disfavored" motion - especially when defendant had already filed its answer - the Court signaled that the willfulness argument, in a typical ANDA scenario, will no longer succeed in D. Del.

Sepracor Inc. v. Dey L.P., C.A. No. 06-113-JJF (D. Del. Sept. 26, 2008) (Farnan, J.).

Thanks to Bob Matthews at Latimer Mayberry in Virginia for sending us a recent case similar to Judge Robinson's fees decision, posted below. Just two days before the Delaware decision issued, the Northern District of Ohio reached the same conclusion: "A finding of inequitable conduct regarding the '346 patent, even if made during the fee hearing, would compel a finding that the patent is invalid, notwithstanding that this issue was previously eliminated from the case by Vector's dismissal."

The result? Just as in the Delaware case, a prevailing party could not raise enforceability via a fees motion.

Euclid Chem. Co. v. Vector Corrosion Techs., Inc., C.A. No. 01:05 cv 80 (N.D. Ohio Sept. 24, 2008).

On Friday, District Judge Sue L. Robinson resolved an atypical motion for attorney fees. By its motion, a prevailing defendant sought reimbursement on the ground that plaintiff alleged inequitable conduct rendered the subsequent litigation frivolous. The catch? The Court never actually ruled on the unenforceability issue:

"Given the fact that plaintiff's claims of infringement asserted against defendants have been dismissed with prejudice, defendants are asking me to make a substantive determination as to the validity of a patent, under the guise of a motion for attorney fees, when a court would not otherwise have jurisdiction to do so. I decline to undertake such an analysis."

Novo Nordisk A/S v. Sanofi-Aventis, C.A. No. 05-645-SLR (D. Del. Sept. 26, 2008) (Robinson, J.).

Following a plaintiff's jury verdict and post-trial proceedings, including sanctions motions, District Judge Joseph J. Farnan Jr. has entered a final judgment in the St. Clair/Fuji infringement litigation. The Court entered judgment for St. Clair in the amount of $3,003,465.00, with interest and costs.

St. Clair Intellectual Property Consultants Inc. v. Fuji Photo Film Co. Ltd., C.A. No. 03-241-JJF (D. Del. Sept. 25, 2008) (Farnan, J.).

Last week, a jury returned a verdict for Plaintiff Siemens Medical Solutions, USA, Inc. finding that Saint-Gobain Ceramics & Plastics infringed U.S. Patent No. 5,525,905 related to technology used in PET scanners (medical imaging scanners). Although the jury did not find willful infringement, the total compensatory damages awarded were $52.3 million. Siemens Medical Solutions, USA, Inc. v. Saint-Gobain Ceramics & Plastics, C.A. No. 07-190-SLR, Jury Verdict (D. Del. Sept. 25, 2008).

Another plaintiff's verdict in the District of Delaware...

For a copy of the verdict form see here.

Resolving a charge of inequitable conduct requires a close reading of an often conflicting factual record for clues that evince an intent to deceive. In a post-trial opinion released yesterday, District Judge Joseph J. Farnan Jr. acknowledged that fine evidentiary line by reluctantly refusing to find a patentee defrauded the PTO by summarizing, instead of naming, the controlling prior art.

Although labeling the mode of disclosure suspicious, the Court, based on these findings, ultimately declined to hold the patent-in-suit unenforceable:

"[T]he Court is troubled by the fact that Dr. Eklund possessed known material prior art references but did not disclose the actual references themselves. However, absent a bright line rule by the Federal Circuit that non-disclosure of possessed, material art equates with inequitable conduct, the Court is unwilling to strike a patent in the circumstances of a plausible explanation for that non-disclosure."

This decision underscores the importance of the standard of proof in patent litigation: to demonstrate an inequity clearly and convincingly requires more than arguing that the patentee neglected to choose the optimal vehicle for disclosure.

Power Integrations Inc. v. Fairchild Semiconductor Int'l Inc., C.A. No. 04-1371-JJF (D. Del. Sept. 24, 2008).

Following post-trial decisions on invalidity and evidentiary matters earlier this year, District Judge Joseph J. Farnan Jr. has entered a final judgment in the Boehringer/Mylan Pharmaceuticals ANDA litigation. In its June 2008 decision, the Court held the patent-in-suit infringed but invalid. In negotiating the subsequent final judgment, the parties disputed whether the Court should memorialize its finding of infringement. After the parties submitted competing proposals, the Court, without comment, chose to omit any reference to its infringement finding.

Boehringer Ingelheim Int'l GMBH v. Barr Labs. et al., C.A. No. 05-700-JJF (D. Del. Sept. 18, 2008) (Farnan, J.).

Young Conaway Stargatt & Taylor, LLP will host the International Trademark Association’s Wilmington, Delaware roundtable on Wednesday, October 22, from noon to 2 p.m. The topic is “Internet Enforcement – Who, What, and Where Are We to Search?” and lunch will be served. Young Conaway Associate Sara Beth Reyburn Kohut will chair the discussion that will address laws applicable to trademark issues and the internet, selecting and registering trademarks and domain names, domain name piracy, metatags and keyword use, hyperlinking and framing, cybersmearing, and strategies for protecting and enforcing trademarks and other intellectual property on the internet.

We expect it to be an interesting discussion that will benefit those who have experience with these issues, as well as those who want to learn more about them.

Membership in INTA is not required to attend the roundtable, but all attendees must register and there is a $45 fee. For more information, visit www.inta.org or contact Sara Beth Reyburn Kohut at sreyburn@ycst.com or 302 571 5004.

Author: Sara Beth Reyburn Kohut

District Judge Sue L. Robinson has issued a decision in the long-running Cordis/Medtronic litigation clarifying the standards and procedures surrounding several damages issues common to patent litigation.

In yesterday's memorandum opinion, the Court first addressed pre-judgment interest, holding that the proper measure is the prime rate of interest, rather than the U.S. treasury-bill rate, compounded quarterly. The Court also considered the award's tax treatment, noting that because "taking into account the tax consequences of a damages award best reflects reality," the final interest award should be based on the "after tax amount of damages."

Finally, the Court rejected a request for a new damages trial based on an intervening arbitration decision that recognized the defendant as a licensee. According to the Court, an earlier stipulation of infringement in the litigation precluded such a request: "The Court declines to allow [defendant] out of its agreement based on later, business-related proceedings of which it was not a part."

Cordis Corp. v. Medtronic Vascular Inc., C.A. No. 97-550-SLR (D. Del. Sept. 15, 2008) (Robinson, J.).