Eastern District of Texas Federal Court Practice

Thermapure - setting the stage for the retrial

Thermapure v. Water Out Drying. Corp., 2:06cv453 (E.D. Tex. Nov. 13, 2009)

Judge: Chad Everingham

Holding: Motion for New Trial GRANTED in part

As readers will know, this case is the asterisk in this year's trial statistics.  Judge Everingham tried this case with a Marshall jury in March, and on March 20, 2009, the jury returned a partial verdict, finding that defendant Water Out induced infringement of claim 6 of the ’812 patent and that the ’812 patent was not invalid. But the jury failed to reach a verdict on the issue of damages.

Plaintiff Thermapure asked that the court render partial judgment on infringement and validity, issue a permanent injunction on the jury’s infringement finding, and limit any new trial to the issue of damages.  Defendant Water Out argued that the court should order a new trial on all issues, including infringement, validity, and damages, and that Thermapure was not entitled to a permanent injunction.

Judge Everingham reviewed the law on what you do after partially hung juries in patent cases, and concluded that the plaintiff was entitled to partial judgment of infringement, and validity.  Accordingly, he limited the grant of new trial to damages only, starting with jury selection on March 1, 2010.  He carried the request for injunction with the case.

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.

... 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.

Patent Case Transferred to Ohio

Immersion v. Mentice, 2:08cv161 (E.D. Tex., Sept. 29, 2009)

Judge: Chad Everingham

Holding: Defendants' Motion to Transfer Venue GRANTED

Earlier this evening Judge Everingham granted the defendants' motions to transfer this patent case to Ohio, finding that "[t]he balance of the private and public factors demonstrates that the transferee venue is clearly more convenient than the venue chosen by the plaintiff" citing the Fifth and Federal Circuit VW cases and the Federal Circuit's Genentech case.  But the case which most closely resembled this one, Judge Everingham, was In re TS Tech, in which the Federal Circuit held that a case should have been transferred to Ohio.

Summary Judgment of Noninfringement Recommended Granted

Abstrax, Inc. v. Dell, Inc. et al, 2:07-cv-00221 (E.D. Tex. 9/18/09)

Judge: Chad Everingham

Holding: Motion for Summary Judgment as to Noninfringement Recommended GRANTED IN PART.

Several good recent orders out of this case.  Two weeks ago Judge Everingham denied the motion for summary judgment as to willful infringement, following a ruling last month granting a codefendant Sun's motion to transfer venue, sending Sun to California, but maintaining the case against Dell in Texas.

Last week he recommending granting in part Dell's motion for summary judgment of noninfringement as to some of the plaintiff's literal infringement claims as well as all of plaintiff's claims under the doctrine of equivalents where plaintiff "agree[d] that its case is one for literal infringement. . . . [but] wants to preserve its ability to raise infringement under the doctrine of equivalents in its rebuttal case" in the event defendant argued at trial that its accused programs operate in a manner that is different from the manner described in plaintiff's expert's report. The court observed that the plaintiff did not argue that it had insufficient opportunity to investigate the operation of the accused programs, or that it lacked an ample opportunity to take discovery into the defendants's expert's opinions.  Under these facts, then, Plaintiff could not continue with its DOE claims.

Judge Everingham's order examined the literal infringement issues raised in Dell's motion and granted summary judgment as to some of them, as noted above.  Dell also sought summary judgment on the issue of indirect infringement, but Judge Everingham denied that motion since there was outstanding discovery, and directed that the issue could be re-raised as a motion for judgment as a matter of law later on.  The court also denied Dell's motion that summary judgment was proper under 35 U.S.C. § 271(g).

Motion for Summary Judgment as to Willfulness Claims and Invalidity Denied

Abstrax, Inc. v. Dell, Inc. et al, 2:07cv00221)(E.D. Tex., Sept. 11, 2009)

Judge: Chad Everingham

Holding: Motion for Summary Judgment of No Willful Infringement  & Invalidity Recommended DENIED

The day after granting the defendants' motions for summary judgment as to the plaintiffs' willfulness claims in Crane v. Sandenvendo America, Judge Everingham found that another defendant had not met its burden to show the absence of a genuine issue of material fact on the same issue and recommended denying defendant's motion for summary judgment of no willful infringement.  Although the defendant contended that it had substantial defenses to infringement, and its invalidity case was strong enough to withstand a finding of willful infringement, plus that anyone investigating the patent during the time of the alleged infringement would have determined that the maintenance fees had not been paid, the patent had been abandoned, and any revival of the patent was ineffective.  However, "the undersigned is not persuaded that summary judgment is appropriate. Evaluation of the relative merits of the infringement and validity issues is best suited for a fully developed trial record."

Judge Everingham also recommended denying defendant's motion for summary judgment of invalidity based on the argument that the asserted patent claimed unpatentable subject matter under In re Bilski, 545 F.3d 943 (Fed. Cir. 2008).

Summary judgment granted as to claims of willful infringement; case settles prior to jury selection

Some interesting rulings at the pretrial conference last Thursday September 10 in Crane v. Sandenvendo America and Royal Vendors Thursday (I am local for Sandenvendo so I had a good seat for them).  This is a patent infringement case dealing with glass-front cold drink vending machines brought by Crane against Sandenvendo and Royal.  The Court conducted an initial pretrial week before last, but set a second one to address pending summary judgment and other motions on the Thursday before jury selection.

Judge Everingham began the pretrial conference by hearing argument on the plaintiff's motion to disqualify one of the law firms representing Royal filed shortly before the initial pretrial a couple of weeks . After half an hour of argument, Judge Everingham denied the motion, noting that the subject matter of the two cases was not "substantially related", citing Judge Folsom's opinion in the Power Mosfet Technologies case interpreting the Fifth Circuit's American Airlines standard.

Next up were defendants' motions for summary judgment as to the plaintiff's claims of willful infringement.  After another almost half hour of argument, Judge Everingham granted Sandenvendo's motion, and then Royal's, telling the parties that he believed that willfulness just wasn't in the case, in light of the raised standard of Seagate.  The plaintiff had offered at the beginning of the hearing to drop its willful infringement claims if the evidence of the pending reexam was excluded, but the defendant argued that the reexam was admissible for other reasons as well, so the plaintiff continued to argue that willful was in the case, and thus summary judgment was not proper.

Defendants next sought summary judgment on notice issues, arguing that there was no legally effective notice prior to the filing of the lawsuit.  Defendants countered with evidence of conversations and letters prior to filing that they contended provided the requisite notice, and at the very least when inferences were taken in favor of the non-moving party created a fact issue as to whether the required notice was given, and thus precluded summary judgment.  Judge Everingham agreed that summary judgment was not appropriate on the notice issue, orally denying the notice MSJs by both defendants.  But as to the motions seeking summary judgment on the plaintiff's claims for lost profits, the court carried the motion, promising a ruling before the evidence began on Tuesday (the case was set to pick a jury Monday, September 14.

At this point, plaintiff's counsel told the judge he thought the case couldn't be ready for trial due to the need to complete a corporate representative deposition of one of the defendants, as well as a claim that the other defendant had not produced documents.  Judge Everingham resolved the deposition issue by ordering the deposition taken Saturday the 12th, and then told the parties in no uncertain terms that the case would not be continued and that they would be starting trial on Monday.  .

The judge then ripped through the parties' numerous motions in limine, many of which raised common issues in cases such as these, including providing rulings on the admissibility of evidence of the pending reexamination, including the final office action recently issued by the PTO on one of the three asserted patents.  This issue was unusually (and unexpectedly) complex since the day before the hearing the plaintiff had filed amendments to most of the asserted claims in the second patent in the PTO.  At the hearing, however plaintiff asserted that was a mistake and that none of the claims were really being amended - and later in the day provided an amended PTO filing for the court's review to confirm that trial was not being sought on amended claims which had not yet issued, something the Court expressed distinct opinions regarding.

With that issue out of the way, next up was the defendants' motion to strike the plaintiff's fifth amended infringement contentions.  In this case, the plaintiff amended its contentions following the Court's claims construction to assert doctrine of equivalents for the first time, claiming that the amendment did not require leave of court because they were surprised by the Court's Markman ruling as to a term.  The parties argued the applicability of Judge Clark's Nike opinion, in which he held that a party could only amend without leave following a Markman if it was truly surprised by the Court's construction, and that a construction that adopted (or essentially adopted) a party's construction could not constitute surprise.  In this case, defendants were claiming that the construction was essentially defendants' construction, thus the amendment could not be under the "post-Markman plus surprise" PR 3-6(a), which did not require leave, but instead should require leave under PR 3-6(b), which requires "good cause".  Plaintiff argued that there was the requisite surprise to permit amendment without leave.  Judge Everingham stated that he would carry this motion, and did not announce a ruling.

The parties reached settlements yesterday and today prior to picking a jury.

Note: After writing the initial post I added a postscript to the part about the noninfringement summary judgment noting that the plaintiff had offered at the beginning of the hearing to drop its willful infringement claims if the evidence of the pending reexam was excluded, but the defendant argued that the reexam was admissible for other reasons as well, so the plaintiff continued to argue that willful was in the case, and thus summary judgment was not proper, thus resulting in Judge Everingham's ruling that willful was not in the case.

Patent Case Transferred to California

Abstrax, Inc. v. Sun Microsystems, Inc., 2009 WL 2824581(E.D.Tex. Aug 28, 2009) (NO. 2:07-CV-333)

Judge: Chad Everingham

Holding: Renewed Motion to Transfer Venue GRANTED

This was a renewed motion to transfer venue.  The original motion was filed November of 2007, and was denied without prejudice to refiling in order to brief the new standards set forth in the en banc In re Volkswagen case.  The renewed motion was filed last October by Sun.  The Sun case was consolidated for purposes of discovery and claims construction with a similar case against Gateway (now no longer a party)and Dell, but those defendants did not challenge venue, and that case remains in the Eastern District.

Judge Everingham noted that Sun was located in the ND Cal and noted the case's similarity to the facts in the Federal Circuit's recent In re Genetech opinion, and lack of similarity to the Federal Circuit's In re Volkswagen opinion, which involved several consolidated cases against numerous defendants.  (Watch carefully - the Fifth Circuit's VW is a mandamus grant, the Fed Circuit's is a mandamus denial).  Significant to the Court's analysis was that Sun agreed to be bound by the Texas court's Markman ruling, and discovery was nearly complete, thus the judicial economy considerations of keeping the cases consolidated in the Eastern District had already been satisfied and the limited consolidation did not require keeping both cases in Texas.

Patent Case Conditionally Stayed Following Final Office Action (plus a little lagniappe)

QPSX Developments 5 Pty Ltd. v. Ciena Corporation et al, 2:07-cv-00118 (E.D. Tex., Aug. 27, 2009)
Motion for Stay Pending Reexamination CONDITIONALLY GRANTED
Judge: Chad Everingham

Judge Everingham granted defendants' motion to stay pending an appeal of a final rejection in reexamination (plus some additional office actions, but pending appeal to the BPAI) on the condition the parties stipulate to not (1) argue invalidity at trial regarding prior art considered in the reexamination, or (2) pursue another reexamination.

The particular facts in the case were important to the Court, which wrote that "[t]he posture of the current reexamination proceedings concerning the [patent-in-suit] is unlike a number of other cases in which this court has denied motions to stay. Here, the claims in suit stand rejected multiple times, by multiple examiners. . . . [B]ecause the only claims asserted in this case are involved in reexamination, disposition of the appeal adversely to [plaintiff] will likely resolve the issues in this case - [plaintiff] unequivocally admits that it does not intend to amend the claims at issue."