For the second time in as many months I am pleased to be able to congratulate my cocounsel on a favorable result in a trial in federal court here in Marshall. Following our firm's assistance in a defense win last month (a JMOL at the conclusion of the plaintiff's case in a patent infringement case) we have a plaintiff's win to report this month.
Today my cocounsel Maria Wormington of the Wormington Law Group and Lin McCraw of McCraw & Gantt, both from McKinney, received a verdict in favor of our client Adriana Castillo Sanchez and her son Raul Argote in Sanchez v. Commercial Transportation, Inc., et al, 2:09cv47 from a Marshall jury in Judge T. John Ward's court. The case arose out of the death of Ms. Sanchez' husband and Raul Jr.'s, dad Raul Argote Robles in a collision with a truck operated by defendant CTI just south of Marshall on US-59 on January 5, 2009..
The jury found the decedent five percent at fault and the defendant trucking company, driver and sibling company (which performed maintenance on the truck) 95% at fault and assessed damages of $2,105,000 between Adriana, her son, and Raul's parents. $1.475 of the damages were were economic losses - the remaining $630,000 was for noneconomic losses.
The case began trial before the Marshall jury on Wednesday, February 17, and continued through Monday February 22. Lin and Maria put on an expert economist, accident reconstructionist, biomechanic, and expert on trucking safety - as well as calling the defendant's trucking safety expert as an adverse witness. The defense did not offer any expert testimony of their own. Of interest, the defendant's case in chief was presented Monday afternoon after the plaintiff rested, and consisted of two witnesses (a bus driver live and a fact witness by reading of deposition) whose combined testimony, including cross, was eight minutes.
This was a particularly enjoyable trial for me because I got to work with Lin again for the first time since he and I were Practice Court partners at Baylor Law School nineteen years ago, culminating in the infamous "full discovery" trial in the summer of 1991 (anyone remember the case of the headless boater?). Professor Powell will be glad to hear that we did a little better on our time management this time, using something like nine hours for our direct examination of our witnesses, and under five minutes for cross of the defense witnesses. Fortunately we still look the same, right? (Love the big hair - don't you miss the 80's?)
Again, congratulations to Maria and Lin on a great result for a deserving client.
The Smith & Nephew v. Arthrex case concluded Tuesday with a jury finding of direct and induced infringement of the one remaining claim asserted. The jury answered no to the public use and on sale defenses, and assessed damages at $4,713,000 ($4.7 million).
That's two wins for the plaintiff and two for the defendants in ED Texas patent cases thus far.
As readers know, the Smith & Nephew v. Arthrex case dealing with the defendant's RetroButton ACL repair device is in its fifth day of trial today in snowy Marshall. Judge Ward has now granted the defendant's motion for judgment as a matter of law with respect to the plaintiff's willful infringement claims (a motion for reconsideration of that decision was filed this morning).
As readers know, I have been posting recently (and including in my talks) recent decisions by judges and juries post In re Seagate to not submit (or not find) willful infringement, either by judges taking it out of the case by summary judgment (Crane v. SandenVendo)or judgment as a matter of law prior to submission to the jury (Southwest EFuels v. 3T), the jury not finding it, or granting a JMOL after the jury finds it (Centocor v. Abbott and Opti v. Apple). This case is the second in the past month (Southwest EFuels v. 3T in January) in which Judge Ward declined to allow a willful infringement claim to go to the jury (to be fair, the JMOL was on all infringement claims in that case, so the ruling had nothing to do with willful infringement per se), and follows a couple of other postverdict findings by Judge Ward and Judge Everingham last fall (Centocor v. Abbott and Opti v. Apple) where willful infringement findings by the jury were subsequently set aside - those opinions discuss the law on this point in detail.
I don't mean to imply that there are not rulings to the contrary, of course - just that there are a number of interesting opinions by local judges on this topic, which provide a very useful analysis of how In re Seagate works, and in what types of cases it eliminates willful infringement claims as a matter of law.
Holding: Motion for Enhanced Damages/Attorneys' Fees GRANTED
Defendant received a summary judgment of noninfringement following Judge Clark's Markman ruling, and now sought to have the case declared "exceptional" under 35 USC section 285 and fees of $300,738.94 for its defense of the action awarded, plus costs. Judge Clark granted the motion, finding that following the Markman ruling the plaintiff's literal infringement claims (no doctrine of equivalents claims were asserted) were objectively baseless and pursued in subjective bad faith. He therefore awarded fees and expenses, but only from that point forward ($63,533.50 in fees and $4,103.79 in costs).
Of interest to those with a thing for procedural issues is the Court's explanation of the difference between exceptional status and a Rule 11 basis for a fee award, as well as its discussion of what costs were and were not recoverable, with some being under 28 USC 1920, and some under 35 USC 285 (an important additional source for costs that are not recoverable under 1920). Kudos to the defendant for a particularly well-documented submission on copy costs, by the way - anybody can win a patent case but rarely can a law firm adequately support a request for copy costs. Judge Clark wrote that "[defendant] submitted a detailed list to the court of the costs of individual copies, what documents each charge corresponds to, and the appropriate invoices. All relate to documents copied and produced to [plaintiff], courtesy copies provided to the court, and color photographs used in [defendant's] claim construction and summary judgment filings." The court awarded costs under Section 285 for photocopies, postage, Westlaw research, and PACER research. "The court finds that these costs, all of which are for research and office expenses, are reasonably included in 'those sums that the prevailing party incurs in the preparation for and performance of legal services related to the suit.'"
Chief Judge David Folsom
Holding: Defendant's Motion to Dismiss GRANTED; Plaintiff's Motion to Disqualify and for Sanctions GRANTED IN PART.
Ever wondered how serious the Eastern District of Texas judges are about the parties' obligations to produce relevant documents in a timely fashion? Read on.
This opinion deals with two motions - a motion to dismiss the plaintiff's patent infringement case for lack of standing, and the plaintiff's responsive motion to disqualify or sanction the defendant's counsel for their alleged conduct in prosecuting the motion to dismiss.
Defendant Cisco sought a dismissal of the action for lack of standing, and thus lack of subject matter jurisdiction, because it claimed that the inventor Mr. Gregory D. Girard, assigned his rights in the patent in suit to a non-party Iperia, Inc., by way of an employment agreement while Mr. Girard was at Iperia. Cisco has since purchased Iperia's interest in the patent in suit, the order notes, which becomes important later.
The same day that the motion to dismiss was filed the plaintiff filed a motion to disqualify Defendant's counsel and to impose sanctions, asserting that Defendants and their counsel had agreed to pay Iperia $500,000 in exchange for its cooperation and favorable testimony in connection with Defendant's motion to dismiss, thus making Iperia the Defendant's "evidentiary puppet" due to the $200,000 "kicker" contingent on Defendant's successful assertion of patent ownership.
Judge Folsom concluded that the invention which became the patent in suit was in fact within the scope of the employment agreement, and thus the Defendant's motion to dismiss for lack of standing should be granted. In doing so, he was careful to point out that he did not rely on any statements or testimony by Iperia, the credibility of which was in dispute.
So Cisco won the battle - now did it win the war? Judge Folsom noted that due to the lack of standing, he did not have subject matter jurisdiction, so the Plaintiff's motion to disqualify counsel was now moot. But as for the motion for sanctions - that was a different issue, as federal courts maintain the ability to police the ethical conduct of attorneys practicing before them.
Chief Judge Folsom first detailed the provision in the Patent License Agreement that formed the basis for the Plaintiff's allegations of improper payment in exchange for favorable testimony, and concluded, applying the Federal Circuit's opinion in Ethicon, that the provision was not illegal, unethical, or otherwise forbidden. Under the facts of this case, the payments reflected the uncertainty over whether Iperia owned the patent, and were not forbidden payments in exchange for testimony. Next, the Court looked at the Plaintiff's claim that the Defendants should be sanctioned because they obtained the Employment Agreement on which the standing issue in this case turned three days before Girard's deposition, and did not produce it until almost two months later. The Defendants actually questioned Mr. Girard about the agreement during his deposition, and its counsel later admitted to the Court that he had a copy of the agreement at the deposition, and "Plaintiff suffered prejudice in that Mr. Girard could not refresh his recollection with the Employment Agreement and Plaintiff could not question Mr. Girard regarding the actual agreement at deposition." To use the Court's terminology, Defendants asked Iperia for the "silver bullet" document (the employment agreement), received it, and did not timely disclose it, to the Plaintiff's detriment. The order goes on to explain just precisely why the document was relevant, and which provisions of the relevant rules and requests required its production.
Judge Folsom concluded that "Defendants' conduct suggests that winning their motion to dismiss has been more important to Defendants than conducting themselves in a fair and forthright manner in compliance with the Federal Rules of Civil Procedure, as well as the professional standards expected of all attorneys practicing in this Court's district" and wrote that "[t]he Court finds that Defendants withheld timely production of the Employment Agreement through a deliberate, willful failure to disclose, thereby consciously disregarding Plaintiff's rights,"
The Court concluded that after the lack of subject matter jurisdiction was shown it could not retain jurisdiction as a sanction, so it denied Plaintiff's motion to dismiss the motion to dismiss, as well as to provide the sealed documents relating to the motion to dismiss to state bar disciplinary authorities. But some substantial sanction was needed, the Court determined, for the Defendant's failure to comply with its duty to supplement its disclosures. Judge Folsom ordered the Defendants to reimburse the plaintiff for its expenses (including attorney's fees) associated with the failure to produce the agreement, and assessed a fine of $100,000 (one hundred thousand dollars) payable to the fines and restitution account of the court. "Such a fine is necessary and appropriate" Chief Judge Folsom wrote, "to protect the sound administration of justice and to punish and deter violation of the Federal Rules of Civil Procedure, the Court's Local Rules, and the professional standards of this Court's district."
Judge: T. John Ward
Holding: Defendant's Motion for Summary Judgment of Noninfringement GRANTED in part and DENIED in part
Our compadre on the plaintiff's side in jury selection in Marshall last Monday (my client was the plaintiff in the second case picked that morning, a nonpatent case) was a little company called Smith & Nephew, which started trial this week on its patent claims against Arthrex over a device used in ACL surgery - S&N sells the EndoButton and Arthrex sells the RetroButton. The lights are on in the parties' rented office space on the square at night, and in the mornings I have to drive to work carefully so as not to run over the lawyers and support staff rushing to the courthouse. (Nice pink tie on the guy running north on Bolivar at 8:13 a.m. this morning).
Late last week Judge Ward issued his ruling on Arthrex's motion for summary judgment (hereafter "SumJudge" in honor of the commercial embodiments in this case) of noninfringement based on the court's claims construction ruling (would that be "MarkMan"?). Judge Ward found that the undisputed evidence showed that there was no genuine issue of fact as to whether the RetroButton literally infringed the asserted claims of the patent in suit, and thus granted SumJudge on that basis (hereafter "OuttaHere"). But the Court found that there was an issue as to whether there was infringement under the doctrine of equivalents (hereafter "DocEquivo") - a reasonable jury could find that the differences between the claim elements and the equivalent structures or methods in the RetroButton were insubstantial. Thus SumJudge was denied as to the DocEquivo claims against the RetroButton.
A related issue was what the plaintiff's expert ("HiredGu--" no, sorry, "PlainExpert") could testify to. Judge Ward held that PlainExpert could not testify beyond the scope of his report, and to the extent that he did not provide sufficient analysis of whether any particular claim limitation ("ClaimLim") is met by the DocEquivo, PlainExpert could not offer an opinion as to whether the equivalent structure ("EquivoStruc") on RetroButton infringed under DocEquivo. In some cases, Judge Ward observed, PlainExpert's report was sufficient - but in others it was not, and he set forth where it was nothing more than "conclusory statements and mere boilerplate language". Thus as to those limitations, Judge Ward ruled that PlainExpert was OuttaHere with respect to whether the ClaimLim are met by the EquivoStruc in the RetroButton under DocEquivo.
Should be a fun trial.
From Docket Navigator.