Eastern District of Texas Federal Court Practice

Patent verdict

A Marshall jury in Judge Folsom's court just returned a verdict in the Retractable Technologies v. Becton Dickinson case, 2:07-CV-250.  Patent infringed, not invalid, and damages of $5 million.

47th Annual Conference on Intellectual Property Law - Institute for Law & Technology

Spending today and tomorrow in Plano at the annual conference on IP law put on by the Institute for Law & Technology at the Center for American & International Law in Plano.

This morning's session is focused on patent litigation, and is chaired by Bruce Sostek.  First up was Hilda Galvan on proceedings at the ITC, then SBPS' Clyde Siebman on venue developments in 2009.  Bob Chiaviello gave a "state of the union" on patent enforcement, and currently at the podium (metaphorically) is Ted Stevenson on patent damages, focusing on the entire market value rule.  After Ted we'll hear from Brett Johnson on Markman practice and a federal judges panel with Judges Folsom and Ward from the Eastern District of Texas and Judge Lynn from the Northern District.  (Note: as Judge Folsom was in trial, Judge Everingham filled in for him).

This afternoon's sessions focus on trademark and copyright issues, then tomorrow's will be devoted to patent prosecution and technology, licensing and IP rights.

Motion to Compel Denied - Noncompliance with "Meet and Confer" Rule

Konami Digital Entertainment Co., Ltd. v. Harmonix Music Sys., Inc., No. 6:08cv286, 2009 WL 3448148, *2-*3 (E.D. Tex. Oct. 22, 2009)

Judge: John Love

Holding: Motion to Compel DENIED

Thanks to Robert Matthews with Matthews Patent Law Consulting for alerting me to this recent opinion by Judge Love which came out while I was on vacation, but which deserves immediate mention since it applies the still relatively new "meet and confer" local rule.

Judge Love's opinion denied an accused infringer’s motion to compel a patentee to produce discovery on technologically-related patent prosecution files, to support athe ccused infringers’ inequitable conduct defense, because the accused infringers failed to procedurally comply with the court’s local rules requiring the lead counsel for each side have a meet and confer before filing any motion to compel.

Judge Love noted that the “lead counsel” identified on the certificate was not the same lead counsel identified on the court’s docket.  “At this time, the Court will not address the substantive merits of the Motion because the moving party has failed to satisfy the requirements of the Local Rules. Pursuant to Local Rule CV-7(h), prior to seeking court intervention, lead counsel for the movant must have a personal conference with the lead counsel for the non-movant. Local Rule CV-7(h). The ‘meet and confer’ rule further explains: ‘In the personal conference, the participants must give each other the opportunity to express his or her views concerning the disputes.  The participants must also compare views and have a discussion in an attempt to resolve their differing views before coming to court.  Such discussion requires a sincere effort in which the participants present the merits of their respective positions and meaningfully assess the relatively strengths of each position.’  L.R. CV-7(h).  The parties apparently agree that a telephone conference occurred prior to the filing of this Motion but disagree as to whether the requirements of Rule CV-7(h) and (i) were met, and if not, who was responsible."  In discovery-related motions, the Certificate of Conference must be signed by lead counsel, Judge Love notes, citing L.R. CV-7(I), and going on to write that "[t]he Court sees no reason that the ‘lead counsel’ signing a Certificate of Conference should not be the same attorney that is designated as lead counsel on the Court’s docket sheet. "  Accordingly, Judge Love denied the motion for failure to comply with the rule and instructed the parties to meet and confer and refile if necessary.

The opinion provides some useful (and additional for readers that were not at the recent bench/bar conference at which this topic came up quite a bit) guidance as to the application of the "meet and confer" rule.

Motion for Summary Judgment as to Patent Defendant's Defenses and Counterclaims Granted in Part; Antitrust Claims Severed

Fiber Systems Intern., Inc. v. Applied Optical Systems, Inc., 2009 WL 3571350(E.D.Tex. Oct 26, 2009) (NO. 2:06-CV-473)

Judge: T. John Ward

Holding: Plaintiff's Motion for Summary Judgment as to Defendant's Affirmative Defense and Counterclaims GRANTED IN PART

This is a patent case which just had its pretrial conference and jury selection last week.  In response to FSI's infringement claim, defendant AOSI raised eight affirmative defenses and counterclaims: (1) patent invalidity, (2) inequitable conduct, (3) impermissible broadening of claims, (4) unenforceability due to express or implied license, (5) patent misuse, (6) antitrust violations, (7) unfair competition, and (8) fraud and negligent misrepresentation. FSI filed a motion seeking summary judgment as to all of these claims. 

On invalidity, AOSI contended that the patent in suit was invalid on grounds of anticipation, obviousness, and lack of enablement.  Judge Ward granted the summary judgment in part here, knocking out AOSI's defenses of anticipation and enablement (the latter of which AOSI did not respond in opposition), but denied it as to obviousness, noting that while AOSI had not designated an expert on obviousness, it was not required to put on expert testimony to support its claim of obviousness.  AOSI had also argued as a ground of invalidity that FSI impermissibly broadened the scope of its claims during reexamination. For essentially the reasons outlined in the Report and Recommendation filed by Judge Everingham, Judge Ward held that AOSI's defense lacked merit, and FSI was entitled to summary judgment on this defense.

On inequitable conduct, Judge Ward denied the motion, finding a genuine issue of material fact.  Also, because AOSI claimed that it was not alleging express or implied license or patent misuse as affirmative defenses, Judge Ward denied as moot FSI's motion for summary judgment as to these issues.

Finally, Judge Ward noted that AOSI's answer raised counterclaims against FSI for antitrust violations, unfair competition, and fraud and negligent misrepresentation.  He denied the motion for summary judgment on the claim for unfair competition, fraud, and negligent misrepresentation, but found that the trial of the antitrust counterclaim in this patent infringement suit posed a significant risk of confusion for the jury, and accordingly sua sponte ordered a separate trial of AOSI's antitrust counterclaim. As such, FSI's motion for summary judgment on this counterclaim was carried with the case. 

Patent Case Transferred

Prust v. Apple Inc, No. 2:09cv00092 (10/7/09)

Judge: T. John Ward    2009-10-07

Holding: Motion to Transfer Venue GRANTED

Short and sweet result for defendant Apple.  Judge Ward wrote that "[t]he plaintiff is in Minnesota, the defendant is in the Northern District of California, and the non-party witnesses are in Minnesota, California, Missouri, Illinois, New Mexico, Colorado, Montana, Georgia, and Florida. The plaintiff has failed to show greater convenience or a sufficient connection to this District that would warrant denying transfer."

Motion to Dismiss Resolved in Patent Infringement Plus Case

Ola, LLC v. Builder Homesite, Inc., 2009 WL 3190443(E.D.Tex. Sep 29, 2009) (NO. 2:08-CV-324-CE)
Judge: Chad Everingham
Holding: Motion to Dismiss GRANTED in part and DENIED in part

Lots of holdings in this opinion by Judge Everingham in a case which involves allegations that the defendants infringed patents, violated the Illinois Trade Secrets Act, breached a contract, committed common law fraud, and engaged in unfair restraint of trade. 

The Court held that the complaint adequately stated claims of joint enterprise liability, was sufficient to state a claim for patent infringement (in part because the court had not yet construed the relevant terms), and was sufficient to state a claim under the ITSA as well as for unfair competition.   Judge Everingham granted the motion to dismiss the breach of contract claim against all but one defendant, as well as the fraud claims, holding that they were preempted by the ITSA.  Finally, the plaintiff admitted that it inadvertently forgot to include claims against three of the named defendants and sought and was granted leave to replead to fix that.

Court Sets Aside Willful Infringement Finding in Centocor v. Abbott

Centocor v. Abbott Labs, 2:07cv139 (Oct. 1, 2009)

Judge: T. John Ward

Holding: Defendant's Motion for JMOL as to willful infringement GRANTED

Judge Ward issued a couple of orders in this case today, one denying denying several of the defendant's motions for new trial / motions for judgment as a matter of law, and this separate one granting Abbott's motion as to willful infringement.  The order details Centocor's reasons why the jury's finding that the new Seagate standard was met should be upheld, and Abbott's that it should not be, and concluded that the latter was the correct ruling:

"The Court finds that the issues of infringement and validity were hotly contested, close, and required an intensely factual inquiry. . . . The jury could have found for either party on the issues of validity and infringement in this case, and although that fact does not automatically immunize an accused infringer from a finding of willfulness, the record developed in this case shows that Abbott presented objectively reasonable and substantial defenses to infringement and validity.  The mere fact that the jury ultimately found for the plaintiffs on the issues of infringement and validity does not diminish the difficulty of the jury’s task, which must be viewed objectively.  Further, the fact that certain facts were not presented to a jury, such as the close issue of claim construction, does not preclude the court to consider them in its determination of, as a matter of law, whether the first prong of Seagate is met.  In this case, the issue of claim construction was close and Abbott’s proposed interpretation for the claims, although eventually not adopted, was reasonable and based upon the specification and prosecution history of the ‘775 patent. Thus, the Court takes the close issues of claim construction into consideration in its determination of whether Abbotts’ actions were “objectively reckless."

The Court finds that this case was close at all stages of the litigation and that Abbott’s defenses and legal arguments, including the close issue of claim construction, were reasonable, legitimate, and substantial. Even when all of the evidence in this case has been reviewed, there is no “legally sufficient evidentiary basis” for a reasonable jury to find as the jury did.  As a matter of law, an “objectively high likelihood of infringement of a valid patent” could not have been found under Seagate’s first prong by clear and convincing evidence.  Because the Court finds that the first prong of the willfulness inquiry is not met, the Court need not address the second prong of Seagate.

Thus, the court granted Defendants’ Motion for JMOL on the issue of willfulness, and directed the entry of judgment as a matter of law that Defendants did not willfully infringe the ‘775 patent.

... and the beat goes on. Motion to reconsider order denying transfer denied.

Mediostream v. Microsoft, 2:08cv369 (E.D. Tex. 9/30/09)

Judge: Chad Everingham

Holding: Motion to Reconsider Order Denying Motion to Transfer Venue DENIED

Okay, now we're up to five venue opinions in patent cases today, four of which are in cases I'm in, and three of which are by Judge Everingham.  In less than 24 hours.

This afternoon the court issued an order that denied a motion to reconsider his prior order denying a motion to transfer.  The original motion was denied prior to VW and TS Tech and the defendants refiled citing the new appellate caselaw.  The court balanced the private and public interest factors, and concluded that most of the factors were neutral. The availability of compulsory process weighed in favor of a transfer, as did the local interest in resolving the dispute. But "[t]he presence of substantial infringement allegations against Dell, however, weighs against many of the factors that would otherwise strongly favor a transfer to the Northern District of California," the Court wrote.  "On balance, the defendants have not demonstrated that the proposed transferee court is “clearly more convenient” for the trial of this case. The motion to reconsider the motion to transfer venue is denied in Case No. 2:07CV376. Microsoft’s motion to transfer venue in Case No. 2:08CV369 is also denied."

Venuepalooza continues - Motion to Transfer Patent Case Denied

Convolve v. Dell, Inc., 2:08cv244 (E.D. Tex. 9/30/09)
Judge: Chad Everingham
Holding: Motion to Transfer Venue DENIED

I don't know what is in the water across the street today, but this is the fourth venue opinion I've seen from Judges Ward and Everingham since 5pm yesterday - and those are in just my cases!

This afternoon Judge Everingham followed up his transfer of the Immersion v. Mentice case to Ohio yesterday afternoon with an order denying a similar motion in this case seeking a transfer to New York.

"Considering all of the private and public interest factors," he wrote, "the defendants have not met their burden of showing that the Southern District of New York is clearly more convenient than the Eastern District of Texas. While one of the public and one of the private interest factors favor transfer, on balance, the remaining factors are neutral or weigh against transfer.  Therefore, the motion to transfer venue is DENIED."

Readers might be interested in comparing the two opinions because Judge Everingham specifically compares the facts in the two cases to recent Federal Circuit opinions - principally In re TS Tech, in deciding whether the "clearly more convenient" showing has been made.

Motion to Transfer Denied - Prior Case Involving Same Patent Pending

Novartis Vaccines and Diag., Inc. et al. v. Bayer Healthcare, LLC et al., 2:08-cv-00068 (E.D. Tex. September 28, 2009)

Judge: T. John Ward

Holding: Motion to Transfer Venue DENIED

Judge Ward denied the defendants' motion to transfer venue for convenience relying primarily on the existence of a related case. He wrote that "[t]he Federal Circuit has found that, in patent cases, the 'consideration of the interest of justice, which includes judicial economy, may be determinative to a particular transfer motion, even if the convenience of the parties and witnesses might call for a different result.' "  In this case, Plaintiffs had pending in Marshall a related lawsuit against another company asserting the same patent-in-suit.  "The two cases involve the same claim construction issues," Judge Ward observed, "and transferring the case will only consume unnecessarily additional judicial resources."  Accordingly, Judge Ward held that "the interests of justice weigh heavily against transfer."