In today's news, my oldest Grayson took this picture of a chicken crossing the road on his way to school in Shreveport (he did not think to ask it why), and we learned that last night a Tyler jury in Judge Rodney Gilstrap's court found for defendant Apple in Core Wireless v. Apple. The jury found none of the five wireless patents infringed after deliberating for about five hours. The plaintiff sought $100 million while Apple pegged the damages if infringement was found at $1 million.
I am avoiding the temptation to point out that the plaintiff laid an egg. (Unsuccessfully, obviously).
Just a reminder of the upcoming USC Gould School of Law 2015 Intellectual Property Institute next Tuesday, March 24, 2015 - 7:15 a.m. to 5:35 p.m. at the JW Marriott Los Angeles at L.A. Live, in Los Angeles, CA
Speakers on cutting edge patent, copyright and trademark issues will include:
Additional highlights include:
Judge: Ron Clark
Holding: Order Approving Proposed Settlement Agreement Affirmed
Following more than three years of bankruptcy proceedings, the bankruptcy court approved a proposed settlement agreement between the bankruptcy trustee on behalf of the bankruptcy estate with two claimants against the estate. Another claimant appealed the order to district court, asserting that the bankruptcy court erred in approving the trustee's proposed settlement when the trustee offered no evidence in support of the settlement at the hearing (there was alleged to be evidence in the record from previous proceedings, and to be fair - they did hand up a notebook) and in approving the settlement under the applicable factors.
Judge Clark began by noting that the bankruptcy court's findings of fact were reviewed under the clearly erroneous standard and its conclusions of law de novo, with its decision to approve the settlement reviewed under an abuse of discretion standard.
After reviewing the underlying facts, the Court concluded that the bankruptcy court did not abuse its discretion in approving the settlement despite the fact that evidence was not offered at the hearing, noting that the case already had more than 1,200 entries on its docket sheet, and the bankruptcy court had already held a lengthy trial on contested claims in the case. At the hearing on the settlement agreement, the trustee requested that the Court take notice of the record, and no party objected to the Court relying on that prior evidence presented to it as the basis for its determination of the settlement agreement – in fact counsel for the objecting claimant was the only counsel to appear by phone rather than in person, and did not offer any evidence or witnesses in opposition to the settlement agreement.
With respect to whether the bankruptcy court abused its discretion in approving the settlement under the relevant factors, the Court concluded that after reviewing the lengthy record, considering the bankruptcy court's wealth of experience with the parties to the appeal and to the settlement agreement, the Court could not say that the bankruptcy court abused its discretion in approving the settlement agreement under the applicable factors.
Last Friday a jury in U.S. District Judge Richard Schell's court in Plano (back when he was an active judge) rendered a verdict in favor of the plaintiff in a complex intellectual property case, Texas Advanced Optoelectronic Solutions v. Intersil.
Breach of Contract
After being instructed as a matter of law that the defendant retained confidential information in breach of a confidentiality agreement, the jury found one dollar in nominal damages attributable to the retention of that information, and that the defendant had failed to comply with the confidentiality agreement. It assessed damages at $12 million as a reasonable royalty arising from this failure to comply.
Trade Secret Misappropriation
The jury then found that the plaintiff had proven that the defendant misappropriated its trade secrets, and assessed $48,783,007 in damages, choosing to place the damages under disgorgement as opposed to reasonable royalty. It further found that the misappropriation resulted from fraud, malice or gross negligence, and assessed an additional $10 million as exemplary damages for that trade secret misappropriation.
(For those of you keep track, we're up to $70,783,007 in damages, and we're not even to the patent claims yet. You might want to resharpen your pencils now. This was a long verdict form).
The jury was then asked whether the defendant had proven that the plaintiff must have known or must have reasonably been able to discover that the defendant had use the plaintiff’s proprietary information to compete products before November 25, 2005, and answered no. It did find, however, that the plaintiff had proven that the defendant fraudulently concealed the facts upon which the plaintiff’s misappropriation of trade secrets claim was based.
The jury found that the defendant intentionally interfered with the plaintiff’s prospective business relations with Apple, and assessed as damages $8 million as the amount that would reasonably and fairly compensate the plaintiff for its lost profit damages arising from the defendant's intentional interference with its prospective relations with Apple.
The jury also found that the plaintiff proved by clear and convincing evidence that the defendant's tortious interference was, again, the result of fraud, malice or gross negligence, and assessed another $10 million in exemplary damages for that tortious interference.
The jury found that all four of the accused products infringed all six asserted claims of the patent in suit, and that the defendant had not proven by clear and convincing evidence that any of the claims were invalid due to obviousness, for failure to satisfy the written description requirement, or for failing to contain a sufficiently full and clear description of how to make and use the full scope of the claimed invention. (In an charming note, the jury not only checked the box for “no”, but added a handwritten “No” for each of the 18 boxes where it was asked and invalidity question).
As far as damages, the jury assessed $73,653.51 in patent infringement damages, and found that the infringement of the patent was willful
($88,783,007 + $73,653.51 = uh, $88 million and some change)
The jury found that the defendant had not proved that its conduct was excused because of laches or unclean hands.
Calypso Wireless, Inc. v. T-Mobile USA Inc., E.D.Tex., March 05, 2015 (NO. 2:08-CV-441-JRG-RSP)
Judge: Roy Payne
Holding: Motion for Sanctions Denied
Last March, Judge Payne denied the defendant's motion for sanctions under 35 USC section 285. Following the Supreme Court's issuance of two new cases, familiar to readers, the Court sua sponte issued this amended order supplementing the prior opinion to reflect the change in the standard of proof and legal standards.
At issue in this motion was the defendants claim that the plaintiffs conduct in the case was exceptional because (1) the plaintiffs conduct allegedly amounted to litigation misconduct, and (2) it pursued a theory of infringement based on a construction of a term that it contended meant that the case was either objectively baseless, or brought in subjective bad faith.
With respect to the claim of litigation misconduct, the defendant identified several facts that it contended supported its claim that the plaintiff pursued the case in a vexatious manner. The Court concluded that the defendant had not demonstrated by a preponderance of the evidence that the case "stands out from others" with respect to the substantive strength of the plaintiffs litigating position or the manner in which the case was litigated, and accordingly was not exceptional on this ground.
With respect to what it characterized as the defendant's primary theory – that the plaintiff knew or should have known that it was pursuing an objectively baseless claim construction theory and thereby an objectively baseless theory of infringement - the Court concluded that while the plaintiff's theory of construction ultimately proved incorrect, considering the totality of the circumstances, it found that the claim construction position was "simply not one that would make this case stand out from others" on this ground either. "The Court ultimately concluded that T-Mobile had the better argument in its Markman ruling," Judge Payne wrote, "but the Court only did so after 15 pages of analysis." It went on to observe the following:
It is the Court's experience that parties in patent litigation suits almost always have conflicting (often substantially conflicting) interpretations of patent claims–and theories of infringement, non-infringement, and validity based upon their interpretation of the patent claims. Accordingly, the Court does not consider a case “exceptional” simply because there is dispute over the construction of patent claims and that a defendant or plaintiff's construction proved to be incorrect–there must be more.
Judges: Wallach, Taranto, Chen
Holding: Grant of Motion for Summary Judgment of Invalidity Reversed
I don't usually post on Federal Circuit cases, but this one I thought deserved a quick shout - and after a sharp-eyed reader pointed out that I was referring to a different grant of a SJ of indefiniteness to AU Optronics by Judge Davis, and not the one the Federal Circuit was passing on - a quick correction.
Almost three years ago, I posted on Judge Davis' grant of summary judgment of invalidity in a different case, Advanced Display Technologies of Texas v. AU Optronics, 6:11cv011 (7/5/12). Never at a loss for an obscure and bizarre analogy, I observed that "[t]his is how you know that Fast Times At Ridgemont High's Jeff Spicoli could not have been a patent lawyer - because this ruling would have broken his heart."
Why? Because Judge Davis' grant of the defendant's motion for summary judgment of indefiniteness in this case following claim construction proceedings, held that the patent didn't provide a way to distinguish between a modulated surface and a highly modulated surface because it provided no objective means "to determine whether a bump was 'smooth'". "I can't help but picture Spicoli trying to reason his way through this logical conundrum," I wrote. "Of course you could distinguish between modulated and highly modulated, dude, whoaaa," I could picture him saying, certain that to see it any differently would be bogus. Totally.
And remember - this wasn't the indefiniteness standard you kids have today where all you have to show is that the patent doesn't inform a person skilled in the art about the scope of an invention "with reasonable certainty." Pah! No, this was old-school, uphill-both-ways-through-the-snow "it's definite unless it's 'insolubly ambiguous'" indefiniteness. And the court still found it indefinite.
Interestingly, it turns out Advanced Display Technologies wasn't the only such case - a year and a half later Judge Davis similarly granted summary judgment in favor of AU Optronics in a different case brought by plaintiff Eidos Display, affirming a report and recommendation by Judge Love, but on the same ground - invalidity due to indefiniteness. And still under the same exacting - yet now obsolete - standard,
Yesterday the Federal Circuit reversed the summary judgment of indefiniteness in Eidos Display v. AU Optronics, et al,, holding that even under the relaxed standard (and this case is interesting in that it may be the paradoxical result that it is because of the relaxed standard for indefiniteness), the patent was not indefinite. Let that one sink in for a while.
Now I know what you're all thinking - what would Spicoli think about this? Well, remember that the Federal Circuit opinion discloses that the issue was no longer "what the hell does 'a contact hole for source wiring and gate wiring connection terminals' mean?" under pre-Nautilus law. Is it one hole or multiple holes? How could we possibly know?
Instead, the post-Nautilus question was instead what would this limitation suggest to someone knowledgeable about LCD manufacturing? Informed by such a person (such as his history teacher Mr. Hand, shown at right), I think Spicoli would agree with the Federal Circuit that the limitation would clearly, clearly indicate that separate holes would be required, and the idea that it would require only one hole would be deeply, deeply bogus.
So while Spicoli might remain baffled at the outcome in Advanced Display Technologies because obviously he could distinguish between modulated and highly modulated, I think Eidos Display would make some sense to him, (although the Court would have totally lost him on the steering wheels analogy).
Pursuant to his announcement in January 2014, U.S. District Judge Richard Schell of Plano took senior status yesterday, following more than 25 years of service on the Eastern District bench, ending the district's brief ten week honeymoon of having all eight judgeships filled.
Judge: Don Bush
Holding: Petition for Habeas Corpus Relief Denied
This opinion by Judge Bush in Plano provides a good overview of the contours of habeas petitions, which make up a substantial portion of the cases filed in federal courts. The writ of habeas corpus, also referred to as the Great Writ, is used to determine if the detention of a prisoner is valid. A writ of habeas corpus, i.e. "you have the the body" from Latin, is used to bring a prisoner or other person before the court to determine if the person's imprisonment or detention is lawful.
Essentially, an inmate, usually proceeding pro se, files a motion to vacate, set aside, or correct sentence pursuant to 28 USC section 2255, challenging constitutional violations concerning his conviction. Such motions are typically referred to magistrate judges for findings of fact, conclusions of law, and recommendations for the disposition of the case by the district judge pursuant to 28 USC section 636 and the Amended Order for the Adoption of Local Rules for the Assignment of Duties to the United States Magistrate Judge in the Eastern District.
The first step in a habeas petition is a conviction of the movant, followed by a sentence of imprisonment. In some cases, the conviction is followed by a direct appeal to the Fifth Circuit, which is unsuccessful or, as in this case, dismissed as frivolous.
What happens next is that the movant files a motion pursuant to section 2255, asserting that he is entitled to relief because of alleged errors in the conduct of his case. Typically there are complaints regarding the performance of trial counsel or appellate counsel, usually that there was ineffective assistance of counsel at each critical stage of sentencing of and appeal. Or the alleged error may be by the trial court or the Government.
In any event, as Judge Bush noted here at the outset of his discussion "a section 2255 motion is 'fundamentally different from a direct appeal'" and only a limited range of claims may be raised, compared to a direct appeal. Errors of law are not enough – the error must be of constitutional or jurisdictional magnitude.
In this case, movant Smith (no relation) actually was not convicted of a crime - he signed a plea agreement which included a waiver of proceedings under section 2255, which the Court noted was permissible. Thus this case does not have the usual recitation of alleged errors during the trial or appellate process (I know - I'm disappointed as well). Instead, the core of the ruling was the Court's review the terms of the plea agreement, including all of the actions that took place at the plea hearing, during which the Court questioned the movant and explained his rights and what he was giving up as a result of his plea of guilty. After an extensive recitation of the facts surrounding the plea, Judge Bush concluded that the plea was in fact voluntary and knowing, thus the waiver must be enforced. The court also noted that the claims of ineffective assistance of counsel did not affect the plea or waiver it self, thus they did not provide relief either. Out of an an abundance of caution, the Court also discussed the movant's claim that the government breached the plea agreement, and concluded that this was not the case. Finally, the court reviewed the standards for a certificate of appealability of a final order in a section 2255 proceeding, and concluded that the movant had not met the standards for such relief
To wrap everything up, Judge Bush recommended that the movant's motion for relief under section 2255 be denied, the case be dismissed with prejudice, and the request for a certificate of appealability denied. He concluded by setting forth the timing and substantive requirements for objections to the findings and recommendations he had just made, and explained the consequences of failure to file objections.
I am a little behind on this post since much of last week was either weather days or seminar, but I wanted to note that last Tuesday a Tyler jury returned a verdict in favor of plaintiff Smartflash against defendant Apple. The jury in Judge Rodney Gilstrap's court found that all three patents were infringed, infringed willfully, were not shown by clear and convincing evidence to be invalid, and set damages at $532.9 million.