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.

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.

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

Protective Order Limiting Patent Owner's Counsel's Access to Confidential Information Granted; Prosecution Bar Included

Hyundai Motor America v. Clear With Computers, LLC, No. 6:08-cv-00302 (May 11, 2009)
District Judge Leonard Davis
Holding: Motion for Protect. Order GRANTED
Judge Davis granted the declaratory judgment plaintiff's motion for a protective order precluding defendant's outside counsel from viewing plaintiff's confidential information since the counsel at issue was extensively involved in the defendant business owner's business dealings.  Specifically, the counsel (David Pridham) counsels the owner (Erich Spangenberg) and his other businesses on litigation, licensing, and patent acquisition. (Now do you get it?)
The Court also held that the plaintiff was entitled to a prosecution bar precluding attorneys with access to plaintiff's confidential information from "participating, advising, or assisting in the acquisition of patent rights and asserting infringement claims related to the producing party's technical information against the producing party" for a period of two years" so as to avoid the defendant's counsel's being tempted to engage in an end run around the provisions of the protective order.

Motion to Limit Number of Claims and Prior Art References Denied

Accolade Systems LLC v. Citrix Systems, Inc. et al, No. 6:07cv00048) (May 11, 2009)
Judge: Leonard Davis
Motion to Limit Number of Claims and Prior Art References DENIED
Plaintiff asked that the court limit the number of claims and prior art references.  Judge Davis denied the motion, noting that "[w]hile the Court always encourages parties to focus their cases to the most relevant claims and references, the Court does not usually impose a limit on the number of claims and references because parties naturally withdraw claims and references that are not viable for use at trial."  Such a restriction was not necessary in this case, he concluded, "because the number of claims [14] and references [26] are already reasonable."

Second Tyler verdict results in $200 million against Microsoft

The second Tyler case, in Judge Leonard Davis' court came back today with a verdict for plaintiff i4i, Inc. against Microsoft with damages set at $200 million.  Jurors found that the infringement was willful, and that the defendant had not proven invalidity by clear and convincing evidence.
Not quite as happy an ending in Tyler for the guys from Redmond as in March, when they got a summary judgment of noninfringement from Judge Davis following jury selection, also in Tyler.
Kind of makes a defendant wish for Marshall, doesn't it?
For those keeping score, after an initial defense run of three and a half out of the first four trie this year, this raises the score for the year to four plaintiff wins, three losses and one do-over.  Half the wins are in Tyler, with one apiece in Marshall and Lufkin (later reduced).  Over the last two and a half years this comes out by my calculation to 18 plaintiff and 18 defense wins.  (Correction: should be 17 and 17 - I double counted the April verdicts).

CSIRO settles during trial

On day 6 of trial, the CSIRO case (CSIRO v. Buffalo et al and Microsoft v. CSIRO).  That leaves only two patent cases being tried in the district as we speak, and both are in Marshall, where the taxpayers are getting their money's worth out of the old 1912 post office that was converted to courthouse use in 1964, and renovated to add a second courtroom in the basement a few years back.

Post-trial Motions Resolved in Mass v. Ergotron

 Mass Engineered Design, Inc. v. Ergotron, Inc., 2:06cv00272 (E.D. Tex. April 17, 2009)
Judge: Leonard Davis
Holding: Request for a Permanent Injunction or Ongoing Royalties DENIED; JMOL & motion for new trial DENIED; Motion for post-trial relief granted and requests for enhanced damages and fees DENIED.
Here's a opinion you can really latch on to.  (Yeah, it hurt me to write it too).  This case was tried to a Marshall jury last November, resulting in a jury verdict of three million against the five defendants, plus a setoff of 120k in favor of defendant Dell.  Readers will recall that Judge Davis recently entered and order denying Dell's motion for a permanent injunction and also rejected the notion of an annual flat-rate royalty, and expressing his displeasure with the parties' proposal re: future royalty rates, instead "preliminarily" setting an ongoing royalty of $4 per infringing unit and ordering the parties to meet and confer. This morning he issued an exhaustive (47 pages) order resolving the many post-trial motions.
I particularly like post-trial orders like this because they give a reader a way to, well, latch on to the various issues that come up in a patent case by discussing them in the context of a trial and the standards by which a jury's determinations are viewed.  What the order technically does is deny Dell’s Motion for Permanent Injunction or Reasonable Royalty, Dell’s Motion for Enhanced Damages and Attorneys’ Fees, and the Defendants’ Motion for Judgment as a Matter of Law (“JMOL”) or New Trial, and grants in part Plaintiffs’ Motion for Post-Trial Relief (by granting JMOL on its implied license defense with respect to Dell's claim, but denying it as to a new trial on damages and enhanced damages, if I'm getting this all right).   This opinion also included the Court’s findings of fact and conclusions of law regarding Defendants’ affirmative defenses of inequitable conduct, laches, and equitable estoppel and Plaintiffs’ affirmative defense of equitable estoppel.   Judge Davis also grants the plaintiff's request for an injunction, but orders the parties to confer on the language of a proposed injunction.  There are not a lot of issues that come up in frequently patent cases that aren't addressed here, so it may be useful reading to see Judge Davis discuss the what's, why's and "how come's" of the case.
This case was more complicated than some because one of the defendants, Dell, asserted patent claims against the plaintiff, so if the names of the motions don't seem consistent with who the parties are, that may be why.

Trial begins in CSIRO v. Buffalo, et al.

A jury was empaneled last week in Commonwealth Scientific and Industrial Research Organisation v. Buffalo Technology (USA), Inc et al  6:06-cv-324 in Judge Davis' court in Tyler, and after a flurry of pretrial activity, evidence was set to start today. 
The activity last week consisted of various motions to delay the start of trial (or to reconsider) following an additional claim construction order issued a week earlier.  Late last week Judge Davis conducted a hearing on these issues and denied them.  This morning an order was entered dismissing the plaintiff's claims against defendant Microsoft, as a result of settlement, and another order was entered reducing the time for trial to 16 hours per side as a result of a stipulation of infringement by the defendants, and the resulting reduction in the parties' time estimates of 30% (plaintiff) and 41% (defendants).