Eastern District of Texas Federal Court Practice

Defense verdict in Ameranth v. Menusoft

Some days you're receiving congratulations to your opposing counsel following a jury verdict, and some days you're on the extending side.  This morning I was on the extending side after a Marshall jury in Judge Chad Everingham's court rendered a defense verdict on infringement and invalidity (anticipation and obviousness) as to all seven asserted claims in Ameranth v. Menusoft, 2:07cv271. 

 

Judgment as a Matter of Law Granted on Willful Infringement Claims in Smith & Nephew case

As readers know, the Smith & Nephew v. Arthrex case dealing with the defendant's RetroButton ACL repair device is in its fifth day of trial today in snowy Marshall.  Judge Ward has now granted the defendant's motion for judgment as a matter of law with respect to the plaintiff's willful infringement claims (a motion for reconsideration of that decision was filed this morning).

As readers know, I have been posting recently (and including in my talks) recent decisions by judges and juries post In re Seagate to not submit (or not find) willful infringement, either by judges taking it out of the case by summary judgment (Crane v. SandenVendo)or judgment as a matter of law prior to submission to the jury (Southwest EFuels v. 3T), the jury not finding it, or granting a JMOL after the jury finds it (Centocor v. Abbott and Opti v. Apple).  This case is the second in the past month (Southwest EFuels v. 3T in January) in which Judge Ward declined to allow a willful infringement claim to go to the jury (to be fair, the JMOL was on all infringement claims in that case, so the ruling had nothing to do with willful infringement per se), and follows a couple of other postverdict findings by Judge Ward and Judge Everingham last fall (Centocor v. Abbott and Opti v. Apple) where willful infringement findings by the jury were subsequently set aside - those opinions discuss the law on this point in detail.

I don't mean to imply that there are not rulings to the contrary, of course - just that there are a number of interesting opinions by local judges on this topic, which provide a very useful analysis of how In re Seagate works, and in what types of cases it eliminates willful infringement claims as a matter of law.

Case Found "Exceptional" After Summary Judgment of Noninfringement; Fees & Costs Awarded From Markman Ruling Forward

Sorkin v. Universal Building Products, 1:08cv133 (E.D. Tex., Jan. 25, 2010)
Judge: Ron Clark

Holding: Motion for Enhanced Damages/Attorneys' Fees GRANTED

Defendant received a summary judgment of noninfringement following Judge Clark's Markman ruling, and now sought to have the case declared "exceptional" under 35 USC section 285 and fees of $300,738.94 for its defense of the action awarded, plus costs.  Judge Clark granted the motion, finding that following the Markman ruling the plaintiff's literal infringement claims (no doctrine of equivalents claims were asserted) were objectively baseless and pursued in subjective bad faith.  He therefore awarded fees and expenses, but only from that point forward ($63,533.50 in fees and $4,103.79 in costs).

Of interest to those with a thing for procedural issues is the Court's explanation of the difference between exceptional status and a Rule 11 basis for a fee award, as well as its discussion of what costs were and were not recoverable, with some being under 28 USC 1920, and some under 35 USC 285 (an important additional source for costs that are not recoverable under 1920).  Kudos to the defendant for a particularly well-documented submission on copy costs, by the way - anybody can win a patent case but rarely can a law firm adequately support a request for copy costs.  Judge Clark wrote that "[defendant] submitted a detailed list to the court of the costs of individual copies, what documents each charge corresponds to, and the appropriate invoices. All relate to documents copied and produced to [plaintiff], courtesy copies provided to the court, and color photographs used in [defendant's] claim construction and summary judgment filings."  The court awarded costs under Section 285 for photocopies, postage, Westlaw research, and PACER research. "The court finds that these costs, all of which are for research and office expenses, are reasonably included in 'those sums that the prevailing party incurs in the preparation for and performance of legal services related to the suit.'"

Marshall Jury Finds for Defendant Google - No Infringement and Patents Invalid

Today a Marshall jury in Judge Everingham's court in Function Media v. Google, 2:07cv279, found that defendant Google's AdSense products did not infringe the nine asserted claims of Function Media's two patents.  The jury further found that Google had shown by clear and convincing evidence that all of the asserted claims of both patents were invalid as both obvious and as anticipated.   

That's a good start to the year for patent defendants in the Eastern District - a JMOL at the close of the plaintiff's case two weeks ago in our Southwest EFuels v. 3T case, and a sweepstakes in this one.  Meanwhile, up in Texarkana the jury in the third case heads towards another verdict this week, and jury selection for the February docket of cases is only six days away...

JMOL order filed in Southwest EFuels v. 3T

Southwest Efuel Network, L.L.C. v. Transaction Tracking Technologies, Inc., 2:07cv311 (Ed. Tex., Jan. 13, 2010)
Judge: T. John Ward
Holding: Defendant's Motion for Judgment as a Matter of Law GRANTED
It took Judge Ward just a day to get the parties a written order memorializing his oral ruling granting defendant's JMOL yesterday morning.  In his order, Judge Ward first concluded that "[t]he undisputed evidence shows that the accused 3T software product does not infringe
the asserted method claims. On cross-examination, Plaintiff’s technical expert conceded that the
accused product does not perform the “sending” step of subpart (f) of independent claim 1. On
cross-examination, Plaintiff’s technical expert conceded that the accused product does not
perform the “sending,” “calculating,” and “transmitting” steps of subparts (a), (b), and (c)1 of
independent claim 6."  (Ed. note: Claims 1 and 6 were the only independent claims asserted).  The Court went on to conclude that "Plaintiff failed to introduce any evidence that the Defendant actually performed the claimed method. Plaintiff failed to introduce any evidence that any customer of the Defendant actually used the claimed method in the Defendant’s accused product."
Key to Judge Ward's holding was the Federal Circuit's recent holding in the Lucent case that based upon the facts presented in that case the evidence was “just barely sufficient” to permit the jury to find direct infringement. Lucent, 580 F.3d at 1318.  "In this case," he wrote, "Southwest provided far less evidence on infringement than the plaintiff in the Lucent case. There, the plaintiff presented evidence that the defendant had instructed its customers to use the accused products in an infringing way, and there were instruction manuals distributed by the defendant showing such use. Accordingly, the Court finds that Plaintiff provided no direct or circumstantial evidence of infringement for a reasonable jury to find infringement."
Judge Ward went on to grant JMOL as to the claims of contributory, inducing, and willful infringement.

Defense Wins JMOL at Conclusion of Plaintiff's Case in Marshall Patent Trial

   I would like to congratulate my cocounsel Joel T. Beres, James ("Randy") Michels, William C. Ferrell and Melissa C. Hunter of the Nashville, Tennessee firm of Stites & Harbison, PLLC for achieving a win for our client Transaction Tracking Technologies, LLC ("3T"), which was a defendant this week in the trial of a patent infringement case before a Marshall jury in Judge T. John Ward's court.
Today, Judge Ward granted 3T's motion for judgment as a matter of law (JMOL) at the conclusion of the plaintiff's case in Southwest EFuel Network, LLC v. Transaction Tracking Technologies, LLC, 2:07cv311, finding that the plaintiff had failed to adduce evidence sufficient to go to the jury as to direct, contributory, inducing, or willful infringement.  3T dismissed its declaratory action counterclaims of noninfringement and invalidity without prejudice following the ruling.  The winning trial team proceeded to analyze the Court's ruling at Marshall's Blue Frog Grill with 3T CEO Cathy Isaacs and trial graphics specialist Charlene Agnew of Advanced Litigation Solutions, Inc. (Don't we look like we're analyzing?)

The case began trial before the Marshall jury on Monday, January 11, and the Rule 50 motion by 3T was granted at the close of the plaintiff's case in chief midmorning of the next day, January 12.  I had a great time working with this exceptional trial team, and was happy to see the client obtain such a great result.  Incidentally, this is my first use at trial so far this year of the new 2010 O'Connor's Federal Rules * Civil Trials rulebook  (which is purple camo this year), which came in handy during the brief trial looking up, well, standards for JMOLs, for one thing, although I was also researching some questions regarding use of depositions at trial using it when the case ended.

Southwest EFuels was one of possibly as many as five patent cases starting trial this week (or perhaps next) in the Eastern District of Texas.  I just saw that the case in Judge Davis' court in Tyler announced settled today shortly before opening statements were set to begin, but I believe that there are still cases proceeding in Judges Everingham, Love and Folsom's courts. 

Summary Judgment of Noninfringement Granted in MHL TEK

MHL Tek, LLC v. Nissan, et al., 2:07cv289 (E.D.Tex. Dec. 15, 2009)
Judge: T. John Ward
Holding: Motion for summary judgment of noninfringement GRANTED.

Okay, it may not be the right logo, but I thought the post needed some visual bling.  This is a patent case dealing with tire monitoring system on cars.  If the name look familiar it's because this litigation gave rise to the two Federal Circuit In re Volkswagen mandamus opinions in the last year - one in 2008 affirming a Michigan judge's decision to transfer a related case to Marshall, where prior litigation was pending, and one this year in this case affirming Judge Ward's decision to keep the related litigation in his court (relying in part on the prior mandamus ruling in the same litigation).  (Incidentally, I highly recommend reading Judge Ward's venue opinion in this case, reported at 2009 WL 440627.  It was his first venue opinion in a patent case following In re VW II and In re TS Tech and I think still remains the most thorough treatment of the various factors that a defendant uses in trying to show whether a proposed transferee forum is "clearly more convenient" as set forth in those opinions).

This case was set to go to trial next month and yesterday Judge Ward notified the parties that he had determined that summary judgment of noninfringement would be granted as to certain of the accused products.  Since it was not clear what this meant for certain other products in the case the Court set a phone conference for later this week.  A written order detailing the court's analysis is to follow, and I'll post on it when it comes out.

Motion to Transfer Denied at to DC, Granted as to ED of Virginia

Digital-Vending v. Univ. of Phoenix, 2:08cv91

Judge: Chad Everingham

Holding: Motion to Transfer Venue GRANTED

Judge Everingham denied the defendants' motion to transfer to the District of Columbia as moot because he granted the alternative motion to transfer to a different location.  Although Plaintiff opposed Defendants’ motion to transfer to DC and argued that a transfer was not appropriate, Plaintiff argued that if the Court determines that transfer is appropriate, that a transfer to the Eastern District of Virginia is more convenient and appropriate.than a transfer to the District of Columbia.  Judge Everingham agreed and sent the case to Virginia, where he found numerous witnesses were located.

Patent Case Transferred to California, citing In re Hoffman-La Roche

SMDK Corp. v. Creative Labs, 2:08cv26 (Dec. 14, 2009)

Judge: David Folsom

Holding: Motion to Transfer Venue GRANTED

It didn't take long for In re Hoffman-La Roche to have an effect on motions to transfer already in the pipeline.  In this case, the defendants asked Judge Folsom to transfer the case to California, and at the scheduling conference the Court set the motion for hearing on January 7.  Today, Judge Folsom cancelled the hearing and transferred the case, citing the new Federal Circuit opinion, noting that there were both defendants and  some prior art activity in the transferee forum.  According, Judge Folsom found that California was a "more convenient" forum, and thus transferred the case.

Postverdict ruling in Opti v. Apple - willfulness finding set aside; rest of verdict affirmed

Opti v. Apple, 2:07cv21

Judge: Chad Everingham

Holding: Motions for judgment as a matter of law granted as to willfulness; denied on other issues

This spring plaintiff OPTi obtained a jury verdict of infringement and willful infringement from a Marshall jury in Judge Everingham's court, with damages set at $19,009,728.  Today Judge Everingham ruled on the various postverdict motions. 

Apple’s motion for judgment as a matter of law on willfulness was granted, its motions on damages and its enablement and prior art invalidity defenses were denied, and OPTi's motion for entry of judgment was granted in part.  (Its motion for enhanced damages was denied as moot).

On the willfulness motion, Judge Everingham echoed (quoted, actually) Judge Ward's detailed ruling two months ago setting aside the willful infringement finding in Centocor v. Abbott, writing that "because 'the issues of infringement and validity were hotly contested, close, and required an intensely factual inquiry,' the court finds that there was no objectively high likelihood of infringement. See Centocor, Inc. v. Abbott Labs., No. 2:07-CV-139, Dkt. No. 326 at 6 (E.D. Tex. Oct. 1, 2009) (Ward, J.)." (Note: to all the lawyers I'm local counsel for, do you see something here that I frequently suggest you include in your briefing?)  

The judgment issued today for a reasonable royalty of $19,009,728 and $2,696,974 in prejudgment interest for a total award of $21,706,702, plus court costs and future interest.  The court concluded that the case was not exceptional under 35 U.S.C. § 285 and denied any attorneys’ fees request.

Incidentally, this is same song, fourth verse on claims on willful infringement in recent months - willful infringement verdict set aside in Centocor, willful infringement not found by jury in Retractable Technologies, summary judgment granted on willful infringement claim in Crane... I don't mean to imply that the decisions either declining to submit willful, juries not finding it, or courts setting it aside are unanimous, even recently (see Abstrax), but there are a lot of them recently for those with an interest to review.  Why might that be of interest?  Because it provides a set of court decisions by the same (or substantially similar) judges with prior experience in this aspect of the law applying the relevant law at the same point in time (i.e. before Congress, the Federal Circuit, or the Supreme Court change it) to different factual and procedural situations.  It's sort of an exploded reverse version of the Socratic method where parties repeatedly ask the Court to rule these claims in or out under different fact patterns.  That's one reason I keep posting the links to these recent opinions - because it's helpful (to me at least) to reread Judge Everingham and Judge Ward's holdings in the different cases.  To borrow a scientific term, we've controlled for the judge and the law - so the different results must be due to the facts, highlighting which facts may be significant. 

And now, I am off to get what I semi-affectionately refer to as the Godzilla Tree up at home.  I am already in trouble for talking to you people so long, so I'll sign off for the evening.