Chief Judge Stark Rules from the Bench on Certain Case Dispositive Motions and Motion for Sanctions, Reserves Decision on Others

September 1, 2016

Publication| Intellectual Property

In MAZ Encryption Techs. LLC v. BlackBerry Corp., C.A. No. 13-304-LPS (D. Del. Aug. 17, 2016), Chief Judge Stark heard oral argument on several case dispositive motions, a Daubert motion, and a motion for sanctions. After a brief recess, he ruled from the bench on several of the motions. First, Chief Judge Stark denied BlackBerry’s motion for summary judgment of invalidity due to obviousness. He found there was a genuine issue of material fact as to whether a person of ordinary skill in the art would have had motivation to combine two prior art references (from which all claim elements allegedly were disclosed) and whether such a person would have a reasonable expectation of success. He noted that the obviousness defense was “quite strong” but that the factfinder (the jury) should be given the chance to decide those issues. Chief Judge Stark similarly denied MAZ’s motion for partial summary judgment of no anticipation. He found that a reasonable jury could conclude that the patent was anticipated by prior art. The Court also took a number of motions under advisement, including a Section 101 issue and cross-motions for summary judgment of infringement/non-infringement.

Finally, Chief Judge Stark denied BlackBerry’s sanctions motion. BlackBerry had moved for sanctions, including precluding the use of certain evidence, due to MAZ’s alleged failure to disclose or supplement material facts, arguments, and infringement contentions during discovery. Chief Judge Stark was “troubled” that the specific details were not disclosed until MAZ’s reply expert report and confirmed that late disclosure “is not the preferred way that this case or cases like it should proceed.” He stated that it would be far preferable to disclose detailed arguments in infringement contentions or in the opening expert report, at the latest. However, he found, in the totality of the circumstances, that the late disclosure was not sanctionable. He reasoned that the late disclosure was not an entirely new theory and was, arguably, proper rebuttal. Using the Pennypack factors, he found that the prejudice to BlackBerry was “troubling,” but that there was some justification for the timing and bad faith was not evident. The Court also noted that the evidence that BlackBerry sought to exclude was important to MAZ’s infringement theory and that BlackBerry, while prejudiced, was still able to devise a non-infringement position. Thus, Chief Judge Stark denied the motion for sanctions.

Key Points: The Court may rule from the bench after argument on summary judgment motions, particularly in those cases close to trial.

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