Eastern District of Texas Federal Court Practice

"Honeywell Loses Texas 'Trolling Try'" Article

Joe Mullin has a good story this week Honeywell Loses Texas "Trolling Try" on the outcome of Honeywell's licensing arm's litigation against eight LCD panel manufacturers in the Eastern District (specifically Judge Davis and Love's court in Tyler).  According to Joe, seven of the eight defendants settled over the course of litigation, but the eighth which did not settle, a small Taiwanese company called Novatek, won summary judgment of noninfringement earlier this month.  (Ed. note - I am part of the team of attorneys representing Novatek in this case so I had sort of heard of this before I saw the article). 
The article focuses on Honeywell's use of the business model of establishing a licensing operation, Honeywell Intellectual Property International (HIPI), which is kept separate from Honeywell’s operating divisions, to monetize its IP.

Multitasking in a patent case

Interesting order today in the LaserDynamics v. Quanta case getting ready to start trial in Judge Ward's court that may say something about bench briefs, or at least the division of labor at trial in patent cases.  The court entered an order stating that Judge Everingham would hear argument on the issues raised in the parties’ bench briefs downstairs while the parties are making opening statements upstairs. 

Jury verdict in Centocor v. Abbott

A Marshall jury in Judge Ward's court rendered a verdict in favor of  the plaintiff Centocor today.  The jury sent out five notes before finding that the defendant infringed all four of the asserted claims.  The jury found that Abbott had failed to show by clear and convincing evidence that the claims were invalid for failure to meet the enablement requirement, the written description requirement, or as anticipated, and that the plaintiff had shown by clear and convincing evidence that the infringement was willful.  

Damages were set at $1.168 billion dollars in lost profits, and $504.128 million in royalties.

Clawback Effective; Privilege Not Waived

Datatreasury v. Wells Fargo, et al, No. 2:06cv00072 (June 8, 2009)
Judge: David Folsom
Holding: Motion to Determine Privilege and Waiver DENIED
Plaintiff asked the court to hold that one of the defendant's documents was not privileged, or if it were, the privilege had been waived.  Judge Folsom denied the motion holding that it contained legal analysis, and the Wells Fargo had not waived the protection, i.e. its "clawback" was effective.

Motions to Transfer Denied; Motion to Dismiss for Lack of Personal Jurisdiction Granted

Acceleron, LLC v. Egenera, Inc., 2009 WL 1606961(E.D.Tex. Jun 09, 2009) (NO. 6:08CV417)
Judge: Leonard Davis
Holding: Motions to Transfer DENIED; Motion to Dismiss for Lack of Personal Jurisdiction GRANTED
Six defendants filed motions to transfer - the sixth also filed a motion to dismiss for lack of personal jurisdiction.  While the motions were originally premised on a prior-filed case in Delaware, while the motions were pending the Delaware action was dismissed for lack of subject matter jurisdiction, so Judge Davis analyzed the motions under traditional convenience standards.  (Well, perhaps "traditional" is not the right word - perhaps "current" would be better).  I won't go through the Court's full analysis, but essentially there wasn't much supporting a transfer to Delaware in the absence of the other case other than that most of the defendants were incorporated there, and the plaintiff was a Tyler company (with its only office and employee in Tyler).  So now showing Delaware was "clearly more convenient". 
With respect to Fujitsu's motion, the Court was not pleased with the procedural manner in which it was raised, noting as "highly irregular" and "highly suspect" under the local rules Fujitsu's late briefing on the issue.  But in the absence of any objection by the plaintiff, the court did not assign weight to this set of facts.  The basis for the motion was essentially that the Fujitsu entities sued had no contacts with Texas and had never sold any allegedly infringing products in Texas, and the Court noted that the plaintiff had not done anything (except browsing a website) to ascertain whether there were any such sales to carry its burden to show that jurisdiction was proper.  Under these facts, the Fujitsu entities were dismissed without prejudice, but the plaintiff was given 30 days to amend its answer and serve the proper Fujitsu entity.

Motion to Dismiss for Lack of Standing Granted

MHL Tek, LLC v. General Motors Corp., --- F.Supp.2d ----, 2009 WL 901334(E.D.Tex. Mar 31, 2009) (NO. CIV.A. 2:08-CV-0125)
Judge: T. John Ward
Holding: Defendants' Motion to Dismiss for Lack of Standing GRANTED
This is a patent case dealing with tire monitoring system on cars.  The defendants had filed FRCP 12(b)(1) motions claiming lack of subject matter jurisdiction because the plaintiffs did not have standing to assert the claims with respect to two of the three patents in suit because they didn't own them.  Judge Ward agreed and granted the motion.  Interestingly, Judge Ward noted that a parallel action against other defendants based on claims of infringement of the same patents was previously filed in his court. See MHL TEK, LLC v. Nissan Motor Co., et al., Case No. 2:07-cv-289-TJW (hereinafter MHL I ). Readers might recognize MHL I as the case giving rise to the venue opinion and the Federal Circuit's two recent In re VW opinions on venue.  Not the Fifth Circuit's In re VW, though.  Defendants from MHL I had previously filed motions to dismiss that case based on the same grounds as the present motion.  According to my notes, that motion was granted last September as to these two patents as well

Motions to Sever to Set Up Motions to Transfer Denied

Sipco, LLC v. Amazon.com, Inc. et al, No. 2:08cv00359) (June 3, 2009)
Judge: David Folsom
Holding: Motions to Sever DENIED
This is a patent infringement case brought against twelve defendants.  At issue in this motion were two defendants' motions to have the plaintiff's claims against them severed so that they could file motions to be transferred to their home forums, unencumbered by the requirement that they show that the proposed transferee forums were "clearly more convenient" for all of the parties and witnesses.  Judge Folsom denied the motions, writing that:

Recently, the Federal Circuit refused to order transfer of a case where transfer would have resulted in multiple lawsuits involving the same issues. In re Volkswagen of Am., Inc., 2009 WL -2- 1425475, at *2 (Fed. Cir. May 22, 2009). In so doing, the Federal Circuit stated that “the existence of multiple suits involving the same issues is a paramount consideration when determining whether a transfer is in the interest of justice.” Id. (emphasis added). Moreover, “a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy, and money that § 1404(a) was designed to prevent.” Id.

In this case, the Court noted that defendants could not argue that transfer of this case is appropriate for all parties because both the Plaintiff and multiple Defendants have offices in the state of Texas. Instead, the moving defendants sought to "create simultaneous proceedings on the same patents and related products in three district courts."   Judge Folsom concluded that doing so "would be unnecessarily wasteful of the court system’s time, energy, and money" and accordingly denied the motions.

Motion to Transfer Venue Denied in "National" Patent Case

Intellectual Capital Holdings Limited v. NEC Corporation of America et al, No. 5:08-cv-00065) (June 2, 2009)
Judge: Caroline Craven   
Holding: Motion to Transfer Venue DENIED
Judge Craven denied the defendants' motion to transfer venue, holding that given the "national character" of the case and the fact that the plaintiff and one of the defendants had connections with Texas counseled against a transfer.  But even if Plaintiff had no connection to the forum, the court concluded that the motion would still be denied because the defendants have still "failed to demonstrate that there is a localized focus of people, events, and evidence in the [transferee forum] as to make that venue clearly more convenient for all involved. To the contrary, this case has a national reach, such that no one particular forum can be said to be clearly more convenient than any other."

Summary Judgement of Noninfringement Granted

Fenner v. Microsoft, et al, 6:07cv8 (June 3, 2009)
Judge: Leonard Davis
Holding: Defendants' Motion for Summary Judgment of Noninfringement GRANTED
Lots of orders flying out of Judge Davis' chambers in Tyler lately.  Last night Judge Davis entered summary judgment of noninfringement in this case by Fenner against defendants Microsoft and Nintendo, and a final judgment of noninfringement.  Readers may recall that this was the case from March where the parties picked a jury and then Judge Davis concluded that no fact issues existed, and summary judgment was appropriate.  This is the order with the court's reasons for this conclusion.

Summary Judgment Granted Based on Licensing Defense

Accolade Systems LLC v. Citrix Systems, Inc., 2009 WL 1514426(E.D.Tex. May 29, 2009) (NO. 6:07 CV 48)
Judge: Leonard Davis
Holding: Motion for Summary Judgment on Licensing Defense GRANTED
This is a patent case set for trial before Judge Davis in Tyler later this month.  The last defendant standing, Citrix filed a motion for summary judgment asserting a license defense based on a settlement agreement the plaintiff entered into with Cisco on April 6.  Plaintiff Accolade filed a motion for leave to conduct additional fact discovery regarding the applicability of the Agreement.  As stated at the pretrial hearing, the Court granted Citrix's motion for summary judgment based on the Agreement release provision, holding that the release provision applied to Citrix as a “customer,” a “user,” and an “Authorized Third Party”, and since the Agreement release provision was unambiguous, he denied the motion for leave to conduct additional fact discovery