Eastern District of Texas Federal Court Practice

Summary Judgment of Invalidity (Obviousness) Granted; Motion for Leave to Amend to Assert Walker Process Claims Denied

The Ohio Willow Wood Company v. Thermo-Ply, Inc., (9-07-cv-00274) (Nov. 20, 2009)
Judge: Ron Clark
Holding: Defendant's Motion for Summary Judgment GRANTED; Defendant's Motion to Amend PICs DENIED
On Friday Judge Clark granted summary judgment ending this case.  It has an interesting procedural history.  After plaintiff OWW filed suit against TP, another company intervened, claiming ownership rights in the patent.  Judge Clark held a hearing on the inventorship and invalidity issues raised to the defendant and stayed the case pending resolution of these issues.  The defendant then filed a motion seeking to assert Walker Process claims (Sherman Act violations which allege fraud before the PTO).  Judge Clark denied the motion, concluding that TP could have met the deadline in the scheduling order for asserting such a claim.
More interesting (not that anyone could ask for more from the first order, of course) is another order, also from Friday, in which Judge Clark granted TP's motion for summary judgment that all asserted claims were invalid as obvious (SJ on anticipation was sought, but not granted).

Patent Case Transferred to California

Vasudevan Software, Inc. v. International Business Machines Corp., 2009 WL 3784371(E.D.Tex. Nov 10, 2009) (NO. 2:09-CV-105-TJW)
Judge: T. John Ward
Holding: Motion to Transfer Venue GRANTED
This is a patent case with the plaintiff in North Carolina and the defendants in New York (but activity related to case in California) and California.  Judge Ward went through the current analysis, and concluded that the defendants had met their burden to show that transfer was appropriate.

Defense verdict in patent case in Marshall; trial stats so far in 2009

Last Thursday a Marshall jury in Judge Ward's court in Fiber Systems Int'l v. Applied Optical, 2:06cv473 returned a defense verdict on infringement in a patent case.  One claim and one product was submitted - from what I've been able to ascertain the plaintiff dropped the rest of the asserted claims right before trial started, and Judge Ward JMOLed two of the three accused products before the case went to the jury.  As for defenses, as I noted in a prior post, a number were summary judged the day before the pretrial conference and a couple set for a later bench trial - the remainder, including invalidity did not go to the jury (whether they were voluntarily dropped by the defendant or dismissed as a result of JMOL rulings I don't yet know).

If true, I think that's the third defense jury verdict in the district this year in patent cases (two Marshall and one Beaumont), not counting Judge Davis' ruling in favor of Microsoft after jury selection in the Fenner case in March, and Judge Ward's granting of JMOL in defendant's favor at the conclusion of the plaintiff's case in Paradox.  That's without getting into the sticky issue of how you count defense wins on damages (Retractable) or on postverdict JMOLs on damages (Hearing Components - award reduced postverdict from $4.6 million to $1.39 million).  By my count then, you can score it this year so far anywhere from 8-3-1 to 6-6-1 (depends on whether you count a post-jury selection grant of summary judgment or not) depending on what you count as a plaintif win and what as a defense win.  The tie is, of course the Thermapure case, which as I posted last was, was a plaintiff win on infringement but a hung jury on damages, which will be retried on damages next March.

Motion to Transfer Granted as to California Defendants - Denied as to New Texas Defendants

Balthaser Online, Inc. v. Network Solutions LLC et al., 2:08cv00430 (E.D. Tex. 2009)

Judge: David Folsom

Holding: Motion to Transfer Venue GRANTED in part.

One of the interesting things about the recent venue cases out of the Federal Circuit (TS Tech, Telular, VW IV and Genentech) is seeing how they affect cases that were in the pipeline when the law changed.  In this case, the California plaintiff had sued a raft of defendants, most from California.  Then after TS Tech indicated that cases should be transferred where all the defendants are clustered in (or near) the proposed transferee forum, the plaintiff added several tee-ninecy defendants in the Eastern District of Texas.  (yes, that's a word around here, and it's the best one to describe the defendants because in this case, size really does matter.  Wonder if there's a West headnote for that?). 

What makes makes this case notable, in addition to the fact that it allows readers to see whether the additional defendants added in this case change the outcome, is that it occurred after a full hearing on the motion, so readers can, as Judge Folsom did, review the transcript and cite to statements by the parties in support of their arguments in response to the court's questions.  Thus there was no question why the new defendants were added - just what the effect would be.

Judge Folsom's order first copncludes that transfer is required as to the original defendants, noting that the plaintiff and most of the defendants were located the ND Cal, and what non-ND defendants there were were insufficient to show that continuing the case in Texas was the way he should go.  But Judge Folsom agreed that a transfer to California would be extremely inconvenient for the small Texas defendants the plaintiff had added.  Two had appeared pro se only, one had not appeared, and one opposed the transfer for convenience reasons.  Judge Folsom concluded that the issues as between the California and the Texas defendants were different enough that they need not be litigated together, thus the motion was denied as to the newly added Texas defendants.

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."

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.

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 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 transferred to California

Chrimar Systems, Inc. v Garrettcom, Inc., et al, 2:09-cv-00085 (E.D. Tex., Aug. 27, 2009)
Holding: Motion to Transfer Venue GRANTED
Judge: T. John Ward

Friday was a good day for defendants!

Defendants' motion to transfer venue for convenience in this case was granted.  The remaining two defendants in this case had principal offices located in the transferee forum, and the Plaintiff . . . had no connections in the Eastern District, thus Judge Ward held that the "clearly more convenient" standard was met.