Delaware Patent Litigation Report

Patent is held unenforceable due to laches and/or inequitable conduct

Amy A. Quinlan — Thu, 04 Feb 2010 18:17:38 -0500

Cancer Research Technology, et al. v. Barr Laboratories, Inc., et al., Civ. No.07-457-SLR, January 26, 2010.

Robinson, J. After trial, the court makes findings of fact and conclusions of law. It finds in favor of the defendants on the defenses of prosecution laches and/or inequitable conduct.

This is an ANDA case involving the generic version of the brain cancer drug Temodar©. A bench trial took place between March 30, 2009 and April 2, 2009 on the prosecution laches and inequitable conduct defenses. As for laches, the court found that CRCT also did nothing "to further the prosecution of [its] application toward the issuance of any claims" for nearly a decade and, instead, preserved its rights through a series of continuations and abandonments. The court concluded that the "ends" - commercialization of a very successful cancer drug - do not justify the "means" employed by CRCT in this case. Taken in the totality, this case involves eleven patent applications, ten abandonments, and no substantive prosecution for a decade. The court further concluded with respect to the inequitable conduct claim that the withheld information directly contradicts statements made in the '291 patent's specification regarding the utility of the claimed compounds, and directly contravenes the patentability of (broadly-written) claim. For these reasons, the withheld inactivity data is highly material. Finally, the court notes that plaintiff's assertions that certain (nondisclosed) positive studies are “cumulative to the disclosure in the specification” are misplaced. Materiality is not adjudged by whether the withheld information is "positive" or "negative;" to the extent CRCT had positive phase II data (regarding malignant melanoma and/or small cell carcinoma of the lung), it was also information that "may have influenced the patent examiner in the course of prosecution." As for intent, the court determined that the information withheld from the PTO was highly material, and that (at least) the inventor knew of the information. He should have appreciated the materiality of the data and his conclusions as they expressly contradicted the disclosure of the pending applications. Under these circumstances, the court finds the inventor’s publications to the scientific community a sufficient basis upon which to infer intent to deceive.

Court rules on evidentiary issues relating to willfulness and damages

Amy A. Quinlan — Thu, 04 Feb 2010 17:16:48 -0500

Cordis Corporation v. Boston Scientific Corporation, et al., Civ. No.03-27-SLR, January 28, 2010.

Robinson, J. The court rules on several pretrial evidentiary issues.

In discussing the application of Seagate to a trial setting, the court notes discomfort in characterizing administrative and court decisions as “objective evidence” for presentation to a jury, since a jury is likely to give such evidence great weight, even when the bases for those decisions are not apparent to the jury. Thus generally only evidence regarding the prelitigation landscape of the dispute will be admitted. Proposed evidence must still pass muster under Fed. R. Civ. P. 403. The parties’ stipulation expanding the trial record to include “the entire record in the above-captioned action” and “[a]ll decisions by this court or by the Federal Circuit” is denied. The court agrees to summarize the procedural history of this case as set forth in the order. No statements issued in any re-examination proceedings will be admitted. The court further provides guidance as to damages. With respect to royalty rates, consistent with the court’s past practice, royalty rates for litigation settlement agreements will not be admitted. A proffer on the issue of copying will be permitted.

Disputed contention, even if untimely, is allowed as harmless error

Amy A. Quinlan — Wed, 03 Feb 2010 17:17:47 -0500

Webxchange Inc. v. Fedex Corporation, et al., C.A. No.08-133b-JJF, January 20, 2010.

Farnan, J. Defendants’ motion to strike Plaintiff’s Third supplemental Response to Defendants’ Interrogatory No. 1 and for a protective order and motion for leave to file a surreply in opposition to Plaintiff’s motion to compel deposition testimony is denied. Plaintiff’s motion to compel deposition testimony is granted in part and denied in part.

The motions at issue relate to Plaintiff’s contentions of infringement, particularly of FedEx’s “shipping” system. Defendants contend that “shipping” was not disclosed in the second supplemental infringement contention, and was only listed as an untimely Third Supplement served eight months too late. Plaintiff contends that “shipping” was timely disclosed in the second supplement, and only clarified in the third supplement. The court finds the issue of whether there was disclosure in the second supplement is debatable, but in any event any untimeliness is harmless error. The current schedule allows ample time for discovery and there is no evidence of bad faith. Plaintiff moves to compel defendants to provide testimony regarding the shipping component. The motion is granted based on the absence of a reason for limiting the discussion of shipping in the deposition. The court finds that an award of costs and fees in this case is not appropriate as defendants were substantially justified in taking the position they did. The court further denied the motion for leave to file a surreply after reviewing the proposed surreply and determining that it did not contain clarification or missing facts that would illuminate issues for the court.

Leave to file second amended answer after deadline is permitted

Amy A. Quinlan — Wed, 03 Feb 2010 16:34:47 -0500

Webxchange Inc. v. Fedex Corporation, et al., C.A. No.08-133a-JJF, January 20, 2010.

Farnan, J. Defendant’s motion for leave to amend its answer is granted.

Defendant moved for leave to file a second amended answer and counterclaims to the complaint. Defendant contends the amendment is timely despite the passage of the January 10, 2009 deadline for amending pleadings, based upon its need to investigate and research the inequitable conduct claim. Defendant contends plaintiff will not suffer any prejudice. Plaintiff contends that defendant has failed to show good cause why it could not have timely amended and that one paragraph of the amendment should be denied as futile. The Court concludes that defendant has demonstrated good cause to file its second amended answer, and that the amendments could not have been made before the pleading deadline, despite Defendant's diligence. The amendment would not be futile, and there is no prejudice since no Markman hearing has taken place, no trial date has been set, and the close of discovery is tied to the issuance of a claim construction order.

Leave to file second amended answer after deadline is permitted

Amy A. Quinlan — Wed, 03 Feb 2010 16:05:09 -0500

Webxchange Inc. v. Dell Inc., C.A. No.08-132-JJF, January 20, 2010.

Farnan, J. Defendant’s motion for leave to amend its answer is granted.

Defendant moved for leave to file a second amended answer and counterclaims to the complaint on May 27, 2009, in order to supplement its affirmative defense and counterclaim of unenforceability of the patents-in-suit due to inequitable conduct. The deadline for amending pleadings was January 10, 2009. Defendant contends that its motion to amend is proper under Rule 15(a) because it was sought without undue delay and because plaintiff will not suffer any prejudice. Defendant asserts that there was no delay because the evidence that forms the basis of the proposed second amended answer was unavailable before the pleading deadline. Plaintiff contends that defendant has failed to explain why it could not have timely amended, and that such amendment would be futile. The Court concludes that defendant has demonstrated good cause to file its second amended answer, and that the amendments could not have been made before the pleading deadline, despite Defendant's diligence.

Patent is invalid for lack of written description

Amy A. Quinlan — Wed, 03 Feb 2010 15:38:54 -0500

Boston Scientific Corporation, et al. v. Johnson & Johnson, Inc., et al., Civ. No.07-333-SLR; Civ. No. 07-348-SLR; Civ. No. 07-409-SLR; Civ. No. 07-765-SLR, January 20, 2010.

Robinson, J. Plaintiff’s motion for summary judgment of invalidity under §112 is granted. Plaintiff’s motion for summary judgment of noninfringement and invalidity under § 103 are denied. Defendant’s motion for summary judgment of infringement is also denied.

The patents-in-suit relate to drug-eluting coronary stents which are used in the treatment of coronary artery disease. Plaintiff sells the alleged infringing product, the Promus stent. Because the Court has declined to adopt each of plaintiff’s proffered claim definitions, plaintiff’s motion for summary judgment of non-infringement is denied. Next the Court considers plaintiff’s claim that the ‘3286, ‘7286 and ‘473 patents (the “1997 patents”) are obvious. Plaintiff failed to cite any expert testimony in support of its motion. The Court notes that plaintiff’s strategic decision has hindered its position as the Court finds that plaintiff’s evidence does not rise to the level of clear and convincing and denies the motion. Plaintiff’s motion for summary judgment that the asserted claims of the patents-in-suit are invalid for nonenablement is denied. The Court finds that the 1997 and ‘662 patents’ specifications are sufficiently definite. As for the written descriptions for the 1997 patents, the Court notes that the precise mechanism of rapamycin was still under investigation at the time that the patents were filed. Besides the requirements that the compounds be structurally similar to rapamycin, the patents’ specifications provide no further guidance regarding the claimed analogs. Defendant can point to no evidence that the inventors had possession of the full scope of the invention as claimed. Rather defendants simply contend that a person of ordinary skill in the art could use the disclosed functionality to identify acceptable analogs. Therefore, the Court finds the written description requirement to be lacking. Similarly, having found that there is no direction or guidance disclosed in the patents and no working examples, the claims are moderately broad, the invention concerns a very complex chemical and biochemical art germane to highly skilled cardiologists and that the patents were filed on the heels of a decade marked by failed attempts to reduce restenosis, the Court concludes that the limitations at issues are not enabled. Similarly, the ‘662 patent specification contains no distinguishing information regarding the identity of the claimed analogs. Thus, the ‘662 patent specification’s description of the claimed analogs’ function does not suffice. The inventors were required to describe at least one representative macrocyclic triene analog. Having failed to do so, the ‘662 patent is invalid for lack of written description. The Court does not consider enablement for the ‘662 patent.

Transfer motion based on "protective" second filing is denied

Amy A. Quinlan — Mon, 01 Feb 2010 17:25:08 -0500

Pfizer Inc., et al. v. Sandoz Inc., Civil Action No.09-742-JJF, January 20, 2010.

Farnan, J. Defendant’s motion to transfer is denied. The Court reserves decision on Plaintiff’s motion to enjoin defendant from proceeding with its later filed suit in the District of Columbia.

Plaintiffs filed in Delaware alleging infringement of the '574 patent by an ANDA filing which sought permission to market a generic version of plaintiff's Caduet® product used to treat high blood pressure and high cholesterol. The next day plaintiffs filed suit against defendant in Colorado alleging the same cause of action. Defendant filed its Answer in the Colorado Action and asserted counterclaims which allege invalidity and non-infringement of the '574 patent, as well as three additional patents. A scheduling order has been issued in the Colorado Action. Defendant also filed a declaratory judgment action in Colorado seeking declarations of invalidity and non-infringement with regard to the same three additional patents. Defendant also filed its answer and counterclaims for declaratory relief in the Delaware Action. By its Delaware counterclaims, defendant seeks declaratory judgments of invalidity and non-infringement of the '574 patent only. Applying the Jumara factors, the Court concludes that transfer to the District of Colorado is not warranted. Defendant contends that plaintiffs' forum choice is entitled to little deference because plaintiffs filed almost identical suits in Delaware and Colorado. However, because the Hatch-Waxman Act is silent on whether a patent holder loses its right to sue if its suit is dismissed for lack of personal jurisdiction after the 45-day window to initiate suit has expired, plaintiff’s "protective" filing in Colorado the day after initiating suit here cannot be consider forum shopping. The other factors do not weigh way heavily in favor of transfer.
Next the Court considers plaintiff’s request to enjoin the Colorado Declaratory Judgment Action. Plaintiffs contend that the Delaware Action is the first-filed action, and that the claims raised by defendant in its Colorado Declaratory Judgment Action should have been raised as compulsory counterclaims in the Delaware Action. In response, Defendant contends that it was plaintiffs who chose to pursue a two-court strategy by filing a "protective" suit in the District of Colorado. Further, plaintiffs' motion is unnecessary and duplicative since motions to stay or transfer both the Colorado Action and the Colorado Declaratory Judgment Action have been filed in Colorado. The Court reserves decision on the pending Motion To Enjoin until the Colorado Court decides its pending transfer motions.

Judge Farnan Announces Retirement

Amy A. Quinlan — Thu, 28 Jan 2010 18:50:02 -0500

After 25 years of dedicated service as a United States District Judge for the District of Delaware, the Honorable Joseph J. Farnan, Jr. submitted his letter of retirement to President Barack Obama. Judge Farnan plans to leave his office on July 31, 2010 and return to the practice of law. During his tenure on the bench, Judge Farnan was pivotal in cementing the Court's reputation as a national venue for complex litigation.

The Court construes 26 disputed terms for four patents-in-suit

Amy A. Quinlan — Mon, 25 Jan 2010 18:13:06 -0500

Boston Scientific Corporation, et al. v. Johnson & Johnson, Inc., et al., Civ. No.07-333-SLR; Civ. No. 07-348-SLR; Civ. No. 07-409-SLR; Civ. No. 07-765-SLR, January 20, 2010.

Robinson, J. The Court provides construction for 26 claims following Markman Hearing.

The Court construes 26 disputed terms for the four patents-in-suit. The patents-in-suit relate to drug-eluting coronary stents which are used in the treatment of coronary artery disease.

The Court construes 19 of 23 disputed terms following a Markman Hearing

Amy A. Quinlan — Mon, 25 Jan 2010 17:53:41 -0500

Flash Seats, LLC v. Pacuolan, Inc., Civil Action No. 07-575-JJF, January 19, 2010.

Farnan, J. The Court construes disputed terms following a Markman Hearing.

The patent-in-suit pertains to a system and method for real-time sales and distribution of tickets which is focused on event ticketing that does not utilize paper tickets. Following a Markman Hearing, the Court directs that the parties meet and confer regarding 4 of the 23 disputed terms and construes the remaining terms.

Laches counterclaim is dismissed

Amy A. Quinlan — Fri, 22 Jan 2010 13:34:23 -0500

Crown Packaging Technology, Inc., et al. v. Rexam Beverage Can Co., Civil Action No. 05-608-MPT, January 15, 2010.

Thynge, M.J. Motion for partial summary judgment dismissing defendant’s laches counterclaim is granted

The court is unpersuaded by Defendant’s laches arguments, noting defendant never undertook any investigation of the circumstances associated with plaintiff’s alleged infringing activities. A reasonable patentee would have suspected Crown’s potentially infringing activities. Thus court finds that Rexam has failed to raise a genuine issue regarding the fact that it should have known of Crown’s alleged infringing activities. Further, because defendant delayed more than six years before filing its counterclaim, this court presumes that the delay was both unreasonable and prejudicial. Rexam did not meet its burden of production and come forward with evidence sufficient to raise a genuine factual issue as to whether economic prejudice exists. Its evidentiary showing is thus insufficient to overcome the presumption of evidentiary prejudice. The evidence also fails to raise a genuine issue of material fact as to Crown’s alleged particularly egregious willful infringement because (1) “there is no affirmative obligation to obtain opinion of counsel in order to avoid liability for willful infringement”85 and (2) there is no affirmative duty of care on potential infringers to determine whether their conduct is infringing, even if they have notice of another party's patent rights.

Court issues claim construction ruling

Amy A. Quinlan — Wed, 20 Jan 2010 19:56:04 -0500

Innovative Patents, L.L.C. and Forcefield, L.L.C. v. Brain-Pad, Inc., C.A. No. 07-680-MPT, January 13, 2010.

Thynge, M.J. Claim construction issues.

The court rejects all of the proposed constructions offered by the parties and construes seven claim terms.

Plaintiff's motion to compel documents withheld as privileged is denied

Amy A. Quinlan — Thu, 07 Jan 2010 16:04:00 -0500

Robert Bosch LLC v. Pylon Manufacturing Corp., C.A. No. 08-542-SLR/MPT, December 23, 2009.

Thynge, M.J. Plaintiff’s motion to compel is denied. Defendant’s oral motion to compel raised at the hearing is also denied. Defendant’s motion for leave to file a reply in response to plaintiff’s latest submission is granted.

The Magistrate considers plaintiff’s motion to compel production of privileged materials where the privilege was allegedly waived by defendant. Plaintiff specifically moved to compel production of certain documents which defendant contends are subject to a common interest privilege. Plaintiff maintains that such documents are discoverable because the opinions of counsel shared between defendant and its supplier were not subject to the common interest doctrine or joint defense strategy. Plaintiff further argues that defendant waived any privilege with regard to all documents and testimony related to validity and infringement of the patents-in-suit because it voluntarily produced documents which reflect advice of counsel. As a result, it claims that defendant waived attorney-client privilege to such communications on the same subject matter. Having reviewed the documents, the Magistrate finds that a joint client relationship existed between defendant and its suppliers, there is no evidence of waiver, and the documents are not relevant to any crime-fraud exception. Therefore, plaintiff’s motion is denied. Defendant’s oral motion to compel is also denied although not discussed in the Opinion. Finally, defendant’s motion for leave to file a reply is granted given the Court’s policy of considering all submissions.

Court declines to bifurcate inequitable conduct

Amy A. Quinlan — Tue, 05 Jan 2010 17:40:35 -0500

Webexchange Inc. v. Fedex Corporation, et al., C.A. No. 08-133-JJF, December 30, 2009.

Farnan, J. Defendants’ motion to bifurcate and for early trial on inequitable conduct is denied. Plaintiff’s motion for leave to file surreply is granted.

The patents-in-suit relate to methods and systems for enabling transactions on the internet. Defendants contend that the evidence of inequitable conduct by the named inventor Lakshmi Arunachalam is so compelling that that it will be case dispositive and prevent the need for further litigation. It would further put a stop to ongoing conduct alleged to be fraudulent and mitigate harm to the public interest. Plaintiff responds that the inequitable conduct defense does not implicate the ‘556 patent and that bifurcation would not eliminate the need for discovery and trial on infringement and validity, and that further delay would be prejudicial. The Court notes that the defendants have a high burden of clear and convincing evidence to prove inequitable conduct. There is a likelihood of duplication of proof common to the inequitable conduct and invalidity cases, such as on prior art, background testimony, and expert testimony, such that bifurcating the trial on the issue of inequitable conduct will not promote judicial economy. The court grants Plaintiff’s motion to file a motion to file a surreply which motion was unopposed as long as Defendants were permitted an opportunity to reply.

Court declines to bifurcate inequitable conduct

Amy A. Quinlan — Tue, 05 Jan 2010 17:32:25 -0500

Webexchange Inc. v. Dell Inc., C.A. No. 08-132-JJF, December 30, 2009.

Farnan, J. Defendants’ motion to bifurcate and for early trial on inequitable conduct is denied. Plaintiff’s motion for leave to file surreply is granted.

Motion to strike inequitable conduct defenses succeeds only in part

Amy A. Quinlan — Wed, 23 Dec 2009 18:38:27 -0500

Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al., Civ. No. 08-309-JJF-LPS, December 18, 2009.

Stark, M.J. Magistrate recommends granting in part and denying in part Defendants’ motion to strike defenses and counterclaims of inequitable conduct and patent misuse.

The technology involved in this declaratory judgment action relates to power converters. The motion to strike inequitable conduct and patent misuse defenses was fully briefed on October 22, 2009. The Magistrate agrees to a limited extent that plaintiff has failed to meet the heightened pleading standard required by Rule 9(b) and Exergen. He finds that at this stage of the pleadings it is reasonable to infer that one person accused of inequitable conduct knew of the materiality of prior art references and failed to disclose them with deceptive intent. With respect to two other individuals, one was not alleged to have been involved in the prosecution, and there are no facts alleged as to the other to show he was aware that statements made to the PTO were false or misleading. The Magistrate thus recommends granting the motion to strike with respect to the latter two individuals, but not as to the first. He further rejects the argument that the inequitable conduct alleged has infected the enforceability of two other patents and recommends granting the motion to strike as to the two other patents. The counterclaims which the magistrate has deemed adequately plead further satisfy the requirements of Rule 12(b)(6) and state a claim upon which relief can be granted.

Transfer to California is granted

Amy A. Quinlan — Wed, 23 Dec 2009 17:52:59 -0500

Qinetiq Limited v. Oclaro, Inc., Civil Action No. 09-372-JAP, December 18, 2009.

Pisano, J. Defendant’s motion to transfer the litigation to the Northern District of California is granted.

The technology covers multi-mode interference devices that may be used to split, combine, or route optical signals. Plaintiff is a U.K company with employees, including the inventors, located in the U.K. Defendant is a Delaware corporation with its principal place of business in California. While Plaintiff’s choice of forum is entitled to substantial deference, the court notes Delaware is not its “home” forum. Plaintiff will need to travel in either forum, but litigating in Delaware will require substantial travel and inconvenience to the defendant with little benefit to Plaintiff. The operative facts occurred outside Delaware.

Application for a permanent injunction is denied

Amy A. Quinlan — Wed, 23 Dec 2009 17:45:59 -0500

IGT v. Bally Gaming International, Inc., et al., Civ. No. 06-282-SLR, December 22, 2009.

Robinson, J. Plaintiff’s motion for a permanent injunction is denied.

The patents-in-suit relate to slot machine technologies. The court earlier found that defendants infringe two of the three patents-in-suit, leaving two issues for trial: willfulness and counterclaim for invalidity of one patent. Trial was canceled, willfulness will be tried with damages after appeal, and the counterclaim was dismissed without prejudice. Plaintiff then moved for a permanent injunction. Courts typically enter permanent injunctions where plaintiff practices the invention and is a direct competitor. The evidence presented does not establish that this is a clear case of a two-supplier market such that a sale by defendant is necessarily a loss to plaintiff. The court finds insufficient evidence of the market or link between infringing sales and a change in the market landscape. Furthermore, there is no clear indication that money damages cannot be calculated. Thus the plaintiff has not met the burden of establishing irreparable harm or insufficiency of money damages.

Recommendation for claim construction issues

Amy A. Quinlan — Wed, 23 Dec 2009 17:34:27 -0500

Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al., Civ. No. 08-309a-JJF-LPS, December 18, 2009.

Stark, M.J. This is a report and recommendation of the magistrate regarding claim construction of the disputed terms of the patents-in-suit.

The patents-in-suit are directed to switched mode power supplies, also known as DC power supplies or power converters. The Magistrate construes ten disputed terms.

Defendant permitted to amend answer to add inequitable conduct claim

Amy A. Quinlan — Mon, 21 Dec 2009 19:00:09 -0500

ICU Medical, Inc. v. Rymed Technologies, Inc., Civil Action No. 07-468-JJF, December 16, 2009.

Farnan, J. Defendant's Motion To Modify Scheduling Order And For Leave To File Second Amended Answer and Counter-Plaintiff's Counterclaims is granted. Plaintiff's Motion For Leave To File Sur-Reply is also granted.

The patents-in-suit relate to needleless intravenous medical connector valves. Previously, the Court issued a Scheduling Order directing the parties to file amendments to pleadings and calling for discovery to end by a date certain. Thereafter, the parties filed a Stipulation And Order For Amending Answer, Defenses And Counterclaims granting Defendant leave to amend its original Answer. Accordingly, Defendant filed an Amended Answer adding certain affirmative defenses alleging unenforceability due to patent misuse and inequitable conduct. Defendant filed the instant Motion To Modify Scheduling Order And For Leave To File Second Amended Answer after the deadline for filing amended pleadings had passed. By its Motion To Amend, Defendant seeks to add a Tenth Affirmative Defense, which alleges that the patents-in-suit are unenforceable due to inequitable conduct. Specifically, the proposed amendment alleges that plaintiff failed to disclose an inventor or co-inventor and other key contributors to the inventions claimed in the patents-in-suit. Defendant contends that it has diligently pursued discovery since learning of information giving rise to the proposed inequitable conduct claim, that the facts and conduct alleged in the Tenth Affirmative Defense have been known to plaintiff, and that no additional discovery would be required by either party. The Court agrees and finds that defendant has demonstrated good cause to amend its Answer as required by Rule 16(b). Defendant's proposed Second Amended Answer pleads a new legal theory-inequitable conduct-based on new set of facts obtained and confirmed during discovery which took place after the Scheduling Order's deadline for amended pleadings. Plaintiff ICU Medical, Inc.'s Motion For Leave To File Sur-Reply will also be granted.