By Memorandum Order entered by the Honorable Maryellen Noreika in Vertigo Media, Inc. et al. v. Earbuds Inc., Civil Action No. 21-120-MN (D.Del. October 14, 2021), the Court denied plaintiffs Vertigo Media, Inc. and Remote Media LLC’s motion for preliminary injunction in their action against defendant Earbuds Inc. claiming infringement of several claims of U.S. Patent Nos. 9,549,024 (“the ‘024 Patent”), 10,198,777 (“the ‘777 Patent”), and 10,116,616 (“the ‘616 Patent”).  In denying plaintiffs’ motion for preliminary injunction, the Court found that plaintiffs did not sufficiently demonstrate that they would suffer irreparable harm in the absence of a preliminary injunction and did not meet their burden of proving a likelihood of success on the merits.  Id. at *7-12.

A copy of the Memorandum Order is attached.

A general take away for practitioners from this case is a reminder that a preliminary injunction is an “extraordinary remedy” that will not be routinely granted in the District of Delaware.  A preliminary injunction will be granted only when the moving party shows (1) a likelihood of success on the merits; (2) irreparable harm if an injunction is not granted; (3) the balance of equities tips in favor of the moving party; and (4) an injunction is in the public interest.  The Court cannot and will not grant a preliminary injunction unless the moving party makes a clear showing of irreparable harm and likelihood of success on the merits.  To make a “clear showing”, the moving party has to put forth evidence supporting its claims.  Unverified allegations in the complaint and/or attorney argument in briefs or elsewhere, unsupported by sworn affidavits or testimony, clearly will not suffice.  Also, if the alleged damages can be quantified and/or fully compensated by an award of money damages, more likely than not there will be no finding of “irreparable” harm.

By Memorandum Opinion entered on appeal from the United States District Court for the District of Delaware in SRI International, Inc. v. Cisco Systems, Inc., Case 20-1685 (Fed. Cir. September 28, 2021), the Federal Circuit reinstated the trial jury’s finding of willful infringement, affirmed the district court’s grant of attorneys’ fees and reinstated the district court’s award of enhanced damages, and reversed the district court’s judgment as a matter of law of no willful infringement on remand.

In doing so, the Federal Circuit explained that, by its prior reference to the language “wanton, malicious, and bad faith” from the U.S. Supreme Court’s decision in Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923, 1932, it did not intend to create a heightened requirement for willful infringement.  Rather, “that sentence from Halo refers to ‘conduct warranting enhanced damages,’ not conduct warranting a finding of willfulness.”  Id. at *9 (quoting Halo, 136 S. Ct. at 1932).  The Federal Circuit clarified that “the concept of ‘willfulness’ requires a jury to find no more than deliberate or intentional infringement.”  Id. at *10.

In addition, the Federal Circuit clarified that, “[a]lthough willfulness is a component of enhancement, ‘an award of enhanced damages does not necessarily flow from a willfulness finding.’”  Id.  Indeed, “[d]iscretion remains with the district court to determine whether the conduct is sufficiently egregious to warrant enhanced damages” pursuant to 35 U.S.C. § 284.  Id.  Thus, on appeal, the Federal Circuit reviews a district court’s decision to award enhanced damages for an abuse of discretion.  Id.

A copy of the Memorandum Opinion is attached.

Some general points of take away from the case are (1) the standards for finding willful infringement and awarding enhanced damages are not the same; and (2) a finding of willful infringement does not automatically warrant the award of enhanced damages in every case.

By Memorandum Order entered by the Honorable Maryellen Noreika in Apex Clearing Corp. v. Axos Financial Inc. et al., Civil Action No. 19-2066-MN (D.Del. September 24, 2021), the Court (1) denied Plaintiff Apex Clearing Corporation’s motion to exclude the expert testimony of defendants’ experts Mumford and Distler; (2) denied Plaintiff Axos Bank’s motion for summary judgment on four counts of trademark infringement; (3) denied defendants/counter-plaintiffs Axos Financial, Inc. and Axos Clearing LLC’s motion for summary judgment of non-infringement; and (4) granted-in-part defendants/counter-plaintiffs Axos Financial, Inc. and Axos Clearing LLC’s motion for summary judgment of no actual damages or disgorgement damages.

In denying Apex’s motion to exclude the expert testimony of defendants’ experts, the Court disagreed with Apex’s assertions that Mumford’s opinions were “not based on sufficient data or methodology” and that Distler’s testimony was “too basic to assist the trier of fact.”  Id. at *2.  With respect to Axos Bank’s motion for summary judgment concerning liability on the trademark infringement claims, the Court noted that “likelihood of confusion” is a “fact-intensive inquiry” and “cannot typically be decided at the summary judgment stage.”  Id. at *3.  The Court explained “[t]his case is not the exception.  Genuine issues of material fact as to the similarity of the marks, the strength of the marks, the intent of Defendant in adopting their marks, as well as other Lapp factors exist.”  Id.  Thus, the Court denied the motion.  Id.  The same reasoning applied and same genuine issues of material fact were present with respect to Axos Financial, Inc. and Axos Clearing LLC’s motion for summary judgment of non-infringement.  Thus, the Court denied that motion as well.  Id.  With respect to Axos Financial, Inc. and Axos Clearing LLC’s motion for summary judgment of no actual damages or disgorgement damages, defendants were requesting the Court to bar an award of actual and disgorgement damages.  Id.  As to actual damages, the record was undisputed that “Plaintiff has no actual knowledge of damages resulting from Defendants’ conduct, .  .  . Plaintiff is not seeking lost sales, lost market share, or lost goodwill, .  .  .  [and that] Plaintiff did no corrective advertising.”  Id.  Thus, the Court granted the motion with respect to actual damages.  With respect to disgorgement damages, the motion was denied after recognizing there exists genuine issues of material fact on several of the factors the Third Circuit instructs in Banjo Buddies, Inc. v. Renosky, 399 F.3d 168, 175 (3d Cir. 2005) for courts to consider when deciding whether to grant disgorgement damages in a trademark infringement action.  Id. at *4.

A copy of the Memorandum Order is attached.

By Memorandum Order entered by the Honorable Leonard P. Stark in Baker v. Alpha Consolidated Holdings, Inc. et al., Civil Action No. 18-976-LPS (D.Del. September 17, 2021), the Court granted the combined motion for summary judgment of noninfringement of Defendants Alpha Consolidated Holdings, Inc. and Illinois Tool Works Inc. d/b/a Gumout with respect to the alleged infringement of claims 1-5 of U.S. Patent No. 9,889,961 (“the ‘961 patent”).  In granting Defendants’ motion, the Court found that its claim construction of the term “wherein said neck is adapted”, which is a limitation present in all five asserted claims, “requires the neck of the bottle to be configured such that the threadless paths always align with and press the fuel system’s tabs during insertion.”  Id. at *4.  The Court also found that there was no genuine dispute that the accused products of Defendants have necks that are not configured in the manner required by the Court’s construction of the pertinent term.  Id. at *5.  “Given the Court’s claim construction, and the undisputed evidence, no reasonable factfinder (even taking the evidence in the light most favorable to Baker) could find infringement.”  Id. at *6.

A copy of the Memorandum Order is attached.

Although this blog typically focuses on decisions rendered in intellectual property and/or antitrust cases currently in or that originated in the United States District Court for the District of Delaware or are in the Federal Circuit, every now and then there is a decision rendered in another federal trial or appellate court that is significant enough it warrants going beyond the normal boundaries.  The recent decision rendered by The Honorable Leonie M. Brinkema, of the United States District Court for the Eastern District of Virginia, in Thaler v. Hirshfeld et al., Civil Action No. 1:20-cv-903-LMB (E.D.Va. September 2, 2021), is such a decision.

In Thaler, the Court confronted, analyzed and answered the question of “can an artificial intelligence machine be an ‘inventor’ under the Patent Act?”  Id. at *1.  After analyzing the plain statutory language of the Patent Act and the Federal Circuit authority, the Court held that the “clear answer is no.”  Id.  In reaching its holding, the Court found that “Congress intended to limit the definition of ‘inventor’ to natural persons” which means humans – not artificial intelligence.  Id. at *17.  The Court noted that, “[a]s technology evolves, there may come a time when artificial intelligence reaches a level of sophistication such that it might satisfy accepted meanings of inventorship.  But that time has not yet arrived, and, if it does, it will be up to Congress to decide how, if at all, it wants to expand the scope of patent law.”  Id. at *17-18.

A copy of the Memorandum Opinion is attached.

By Memorandum Opinion entered by The Honorable Richard G. Andrews in Express Mobile, Inc. v. Squarespace, Inc., Civil Action No. 20-1163-RGA (D.Del. August 25, 2021), the Court, inter alia, denied Defendant’s motion to dismiss Plaintiff’s claims of direct infringement.

By way of background, Plaintiff’s complaint alleges that Defendant infringes U.S. Patent Nos. 6,546,397 (“the ‘397 patent”), 7,594,168 (“the ‘168 patent”), 9,063,755 (“the ‘755 patent”), 9,471,287 (“the ‘287 patent”), and 9,928,044 (“the ‘044 patent”) (collectively, “the Asserted Patents”) through its use of certain website building tools.  Defendant, among other things, moved to dismiss Plaintiff’s allegations of direct infringement.  Id. at *2-3.  In short, Defendant asserted that Plaintiff’s complaint does not contain sufficient factual allegations to plausibly allege that the accused instrumentalities – primarily, the Squarespace website builder platform – meet the limitations of the asserted claims.  Id. at *4.  Defendant also argued for some claims that Plaintiff has not alleged that the claim limitations are met under certain claim constructions.  Id.

In response, Plaintiff argued that its complaint does meet the plausibility pleading standard as set forth in Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).  Id.  Plaintiff explained that the level of detail that Defendant was attempting to require from it is not required at the pleading stage and that Defendant was “prematurely seeking detailed infringement contentions” at the pleading stage.  Id.

In denying Defendant’s motion to dismiss Plaintiff’s allegations of direct infringement, the Court agreed with Plaintiff.  Id.  The Court explained that “[t]he Complaint identifies the patents at issue, details how the Accused Instrumentalities build a user’s website, and explains how the actions infringe on each Asserted Patent.  The Complaint need not allege “specific facts” to meet the plausibility pleading standard, but must put the alleged infringer on fair notice of the claim of infringement and the grounds upon which it rests.”  Id. (citing Disc Disease Solutions Inc. v. VGH Solutions, Inc., 888 F.3d 1256, 1260 (Fed. Cir. 2018)).

The Court further explained that the complaint need not explain how each element of an asserted claim is met by the accused instrumentalities.  Id. at *5.  The “purpose of a motion to dismiss is to test the sufficiency of the complaint, not to decide the merits.”  Id.  The merits of Defendant’s arguments concerning claim construction and specific details of how the accused instrumentalities map to each claim element are properly tested at future stages of the litigation (e.g. summary judgment).  Id.

A copy of the Memorandum Opinion is attached.     

By Memorandum Opinion entered by The Honorable Colm F. Connolly in Pharmacyclics LLC et al. v. Alvogen Pine Brook LLC et al., Civil Action No. 19-0434-CFC-CJB (D.Del. August 19, 2021), the Court set forth its findings of fact and conclusions of law on the asserted infringement claims and invalidity defenses with respect to U.S. Patent Nos. 8,008,309 (“the ‘309 patent”), 8,754,090 (“the ‘090 patent”), 9,655,857 (“the ‘857 patent”), and 9,725,455 (“the ‘455 patent”) following a seven-day bench trial.  Plaintiffs’ claims centered under the Hatch Waxman Act, 21 U.S.C. § 355(j), and arose out of Defendants’ submission of an Abbreviated New Drug Application (ANDA) to the U.S. Food & Drug Administration (FDA) seeking approval to market generic versions of Plaintiffs’ brand-name drug Imbruvica®.  Plaintiffs asserted infringement of the four patents-in-suit by Defendants’ ANDA product and Defendants asserted numerous invalidity defenses for the patents asserted against them.

Among its numerous findings of fact and conclusions of law contained in the Opinion, the Court concluded that the ‘309 patent is not invalid due to anticipation by the Pan article.  Id. at *13-31.  In reaching that conclusion, the Court found that claim 10 of the ‘309 patent has a priority filing date of September 22, 2006 – the date of the #720 provisional application; is presumed to have been invented on that date; and, therefore could not have been anticipated by the Pan article, which was published on December 12, 2006.  Id.

A copy of the Memorandum Opinion, which is comprehensive, is attached.  

By Memorandum Order entered by the Honorable Leonard P. Stark in SZ DJI Technology Co., Ltd. et al. v. Autel Robotics USA LLC et al., Civil Action No. 16-706-LPS (Consolidated) (D.Del. August 4, 2021), the District of Delaware granted Plaintiffs’ motion in limine No. 1 to preclude the trial testimony of certain fact witnesses for Defendants, including the current Chief Executive Officer of Defendants who is a former employee of Plaintiffs.  The Court found that exclusion of the testimony of the witnesses is appropriate because the witnesses were not timely disclosed, and Defendants’ delay was neither substantially justified nor harmless.  Id. at *2.  The Court also analyzed the Pennypack factors and found those factors fully support the Court’s conclusion to preclude the trial testimony of Defendants’ Chief Executive Officer and the other excluded witness.  Id.

A copy of the Memorandum Order is attached.

The general takeaway is the importance of counsel and the parties timely disclosing the identity of potential fact and expert witnesses in accordance with the Federal Rules of Civil Procedure and the applicable deadlines set forth in the Scheduling Order in a given case in the District of Delaware.  This ruling shows that, when a party fails to timely comply with deadlines to disclose the identity of fact witnesses and/or expert witnesses, even the testimony of its own Chief Executive Officer may be excluded from trial in a given case.

By Memorandum Opinion entered by The Honorable Richard G. Andrews in TQ Delta, LLC v. 2Wire, Inc., Civil Action No. 13-1835-RGA (D.Del. July 14, 2021), the Court denied Defendant’s motion to exclude the testimony of Plaintiff’s expert witness relating to the testing of the accused infringing products with regard to the Family 4 Patents.  In support of its motion, Defendant argued that (1) Plaintiff’s expert tests are not relevant to the question of infringement because the tests on which the opinions are based do not show how the accused products process a bit stream; and (2) Plaintiff expert’s opinions on the testing are unreliable because he did not perform or observe the tests.  Id. at *4.

Upon evaluation of Defendant’s arguments, the Court found that Plaintiff’s expert tests are relevant to the issue of infringement, the fact that Plaintiff’s expert did not perform the testing himself does not make his opinions on the tests inherently unreliable, and the reliability of Plaintiff expert’s testimony can be tested during trial through cross-examination and other methods.  Id. at *4-8.  Thus, the Court denied Defendant’s motion.  Id. at *8.

A copy of the Memorandum Opinion is attached.