Delaware Intellectual Property Law Update

June 8, 2016

Publication| Intellectual Property

Welcome to the latest edition of the Richards, Layton & Finger Intellectual Property Law Update.  As always, if you have any questions about any of the decisions listed below or the District of Delaware in general, please let us know.

Judge Andrews Denies in Part Parties’ Request to Redact a Hearing Transcript
In Delaware Display Group LLC v. Lenovo Holding Company Inc., C.A. No. 13-2108-RGA (D. Del. May 10, 2016), Judge Andrews granted in part the parties’ motion to redact a discovery conference transcript, but denied the proposal to redact certain pages where the parties did not show a “clearly defined and serious injury” that would arise from public disclosure of those pages.  In support of their unopposed motion to redact the transcript, the parties submitted two declarations outlining four general categories of information that should be redacted as well as two specific portions of the transcript that should be redacted.

Judge Andrews Strikes Unused Exhibits From the Trial Record
In EMC Corporation, et al. v. Pure Storage Inc., C.A. No. 13-1985-RGA (D. Del. May 13, 2016), Judge Andrews considered a motion to seal evidence at trial and struck two financial exhibits from the record as improvidently admitted into evidence.  The exhibits were large spreadsheets admitted on CD-ROMs and unusable by the jury.  Judge Andrews also struck portions of salesforce logs that were not actually used at trial.

Judge Robinson Grants Section 101 Motion to Dismiss for Unpatentable Subject Matter
In Device Enhancement LLC v., Inc., C.A. No. 15-762-SLR (D. Del. May 17, 2016), Judge Robinson granted the defendant’s motion to dismiss the plaintiff’s claims of infringement of its computer programming patent under Fed. R. Civ. P. 12(b)(6) and 35 U.S.C. § 101.  Judge Robinson summarized the current two-step Alice framework for determining patentability of computer programming inventions as follows: (1) the claims “must describe a problem and solution rooted in computer technology and the solution must be specific enough to preclude the risk of pre-emption”; and (2) “the claimed solution must be innovative enough to ‘override the routine and conventional’ use of the computer.” 

Judge Andrews Imposes Prosecution Bar and Covenant Not to Sue on a Non-Practicing Entity’s Executives and In-House Counsel
In Blackbird Tech LLC v. Service Lighting and Electrical Supplies, Inc., et al., C.A. No. 15-53-RGA (D. Del. May 18, 2016), Judge Andrews imposed restrictions on the information that a non-practicing entity plaintiff’s in-house counsel, who also served as its executives, could view.  The defendants sought to impose a prosecution bar that would exclude the plaintiff’s “reviewing attorneys,” including its co-founders, from participating in activities involving the “acquisition of a patent or patent application.”  The plaintiff agreed to a bar on prosecution activities, but argued that a bar against acquiring patents was not appropriate.  The plaintiff also sought to limit the prosecution bar’s applicability to only those products that were not on sale as of the date of the protective order.  Noting that the “main practice” of the non-practicing entity plaintiff was the acquisition of patents and assertion of those patents in litigation, Judge Andrews found that the plaintiff’s co-founders, who also served as in-house counsel, “intend[ed] to litigate these cases entirely.” 

Judge Robinson Orders Defendants to Show Cause Why They Should Not Be Precluded from Using Information Provided by Foreign Parent Company
In Intellectual Ventures I LLC v. Ricoh Americas Corporation, et al., C.A. No. 13-474-SLR (D. Del. May 23, 2016), Judge Robinson accepted Magistrate Judge Fallon’s report and recommendation that plaintiff Intellectual Ventures I LLC’s (“IV”) motion to compel defendants Ricoh Americas Corporation (“RAC”) and Ricoh Electronics, Inc. (“REI”) to produce documents and Rule 30(b)(6) testimony be denied, but further ordered that the defendants show cause as to why they should not be precluded from using any information provided by Japanese parent company Ricoh Company Ltd. (“RCL”) in their defense.  Early in the patent infringement litigation, RCL was an additional party in the case.  Although IV expressed concerns that it would be unable to get core liability discovery unless RCL remained a party to the action, the defendants argued that requiring RCL to litigate the case from “halfway around the world” was unreasonable and created undue hardship in light of REI and RAC’s willingness to defend against the plaintiff’s claims.  Accordingly, RCL was dismissed as a party.

Magistrate Judge Burke Grants in Part Defendant’s Section 101 Motion to Dismiss after Claim Construction Hearing
In Yodlee, Inc. v. Plaid Technologies Inc., C.A. No. 14-1445-LPS (D. Del. May 23, 2016), Magistrate Judge Burke issued a report and recommendation granting in part the defendant’s motion to dismiss under 35 U.S.C. § 101.  Although the defendant’s motion was filed prior to the Court’s claim construction order, Judge Burke noted that “[w]hen a Rule 12 motion is filed on Section 101 grounds, one possible path for a court is to wait to resolve the motion until after claim construction has been decided.”  Judge Burke found that this was the appropriate course of action in this case, where the defendant argued that 162 claims over seven patents were invalid.  Judge Burke determined that waiting until the claim construction ruling had been issued was appropriate because the ruling would “narrow[] the scope of possible outstanding legal issues that might be relevant to [the defendant’s] 101 affirmative defenses.”  

Judge Sleet Appoints Special Master for Motion to Disqualify Counsel
In INO Therapeutics LLC, et al. v. Praxair Distribution Inc., et al., C.A. No. 15-170-GMS (D. Del. May 24, 2016), Judge Sleet appointed a special master to hear the plaintiffs’ motion to disqualify the defendants’ counsel.  Prior to plaintiffs filing their motion, the parties filed a stipulation agreeing that the briefing on the motion to disqualify would be subject to an additional layer of protection requiring defense counsel to create two teams—the litigation team and the disqualification team—and to screen the litigation team from confidential portions of the disqualification briefing.  Six days after the motion, brief, and supporting declarations and exhibits were filed, Judge Sleet issued an oral order setting a telephone conference to discuss the parties’ stipulation and striking the plaintiffs’ filings from the record.   

Judge Andrews Invalidates Defendant’s Patent-in-Suit as Directed to an Abstract Idea
In Visual Memory LLC v. NVIDIA Corporation, C.A. No. 15-789-RGA (D. Del. May 27, 2016), Judge Andrews granted the defendant’s motion to dismiss and invalidated the plaintiff’s patent under 35 U.S.C. § 101 as containing unpatentable subject matter.  The patent-in-suit purported to claim the storage of certain data types by use of “[a] computer memory system connectable to a processor and having one or more programmable operational characteristics.”  Of note, Judge Andrews rejected the plaintiff’s argument that the motion to dismiss must be denied because claim construction was needed.  Judge Andrews noted that the plaintiff had neither offered a proposed construction nor explained how claim construction would impact the Section 101 analysis.  Further, Judge Andrews rejected the plaintiff’s argument that the defendant must prove invalidity under Section 101 by a clear and convincing standard, noting that patent ineligibility is a matter of law and “[w]ith questions of law, the clear and convincing standard ‘has no application.’”

Judge Sleet Partially Grants Motion for Fees and Costs under Section 285
In Inventor Holdings LLC v. Bed Bath & Beyond Inc., C.A. No. 14-448-GMS (D. Del. May 31, 2016), Judge Sleet granted the defendant’s motion for attorneys’ fees and costs but denied its motion for expert fees and costs.  Following dismissal of the plaintiff’s complaint under Alice, affirmed by the Federal Circuit on appeal, the defendant moved for attorneys’ and experts’ fees and costs.  Under 35 U.S.C. § 285 and Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014), Judge Sleet found that the case was exceptional under the totality of the circumstances.


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