Antitrust and Patent Misuse

The United States District Court for the District of Delaware has announced the selection of Jennifer L. Hall to fill the new United States Magistrate Judge position in the District of Delaware.  A copy of the Court’s announcement is attached.

By Memorandum Opinion entered by The Honorable Maryellen Noreika in Prescient Medicine Holdings, LLC v. Laboratory Corp. of America Holdings, et al., Civil Action No. 18-600-MN (D.Del. February 14, 2019), the Court granted Defendants’ motion to dismiss all claims of the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) after finding that Plaintiff failed to allege sufficient facts to assert its antitrust claims.

In its Complaint, Plaintiff alleged that Defendants conspired to exclude Plaintiff from providing laboratory testing services to the Delaware market in violation of Sections 1 and 2 of the Sherman Act and Section 16 of the Clayton Act. Id. at *1. In response, Defendants filed a motion to dismiss all claims of the Complaint pursuant to Federal Rule of Civil Procedure Rule 12(b)(6). Id. Specifically, Defendants argued that Plaintiff’s alleged antitrust claims failed because they did not plead sufficient facts to show antitrust standing and a relevant market. Id. at *3.

Upon review, the Court agreed that Plaintiff’s Complaint did not plead sufficient facts to show the threshold requirement of antitrust standing and relevant market. Id. at *3-12. Accordingly, the Court granted Defendants’ motion to dismiss the federal antitrust claims and also dismissed Plaintiff’s accompanying state law claims after refusing to exercise supplemental jurisdiction over those claims because it had dismissed the federal antitrust claims over which it had original jurisdiction. Id.

A copy of the Memorandum Opinion is attached.

Yesterday, the United States Court for the District of Delaware provided an update on its case assignments and Magistrate Judges utilization plan in light of the last week’s retirement of Judge Gregory M. Sleet.

The update advised that, with few exceptions, all open cases that were formerly assigned to Judge Gregory M. Sleet (GMS docket) have been reassigned to one of the four active District of Delaware District Judges. Newly-filed cases are being assigned in essentially equal numbers to the four active District of Delaware District Judges: Chief Judge Leonard P. Stark (LPS docket), Judge Richard G. Andrews (RGA docket), Judge Colm F. Connolly (CFC docket), and Judge Maryellen Noreika (MN docket).

With respect to utilization of the three Magistrate Judges in the District of Delaware, going forward, in newly-filed cases, Chief Magistrate Judge Mary Pat Thynge will work with all four active District Judges. Magistrate Judge Christopher Burke will be paired with Chief Judge Stark and Judge Noreika, and Magistrate Judge Sherry Fallon will be paired with Judge Andrews and Judge Connolly. Each District Judge will determine how he or she will utilize the Magistrate Judges.

A copy of the District of Delaware’s Updated case assignment and Magistrate Judge utilization plan is attached.

The Honorable Colm F. Connolly and The Honorable Maryellen Noreika both were sworn in as District Judges on the United States District Court for the District of Delaware this week.  They became the 26th and 27th individuals in the history of the Court to be appointed as District Judges.

The Court announced that Judges Connolly and Noreika will begin to be assigned new cases on August 15, 2018.  The Court will be eliminating the Vacant Judgeship (“VAC”) docket.  VAC cases that are currently assigned to a Magistrate Judge without consent of the parties to the jurisdiction of the Magistrate Judge will be reassigned to a District Judge – primarily Judges Connolly and Noreika.  The Court also will be phasing out the regular assignment of cases to Visiting Judges.  Cases that are currently assigned to a Visiting Judge will remain with the assigned Visiting Judge or may be reassigned to a Delaware District Judge – primarily Judges Connolly and Noreika.

The Court also announced that Senior Judge Sleet will be retiring from the bench at the end of September.  All cases assigned to Judgle Sleet (“GMS”) will be reassigned primarily to Judges Connolly and Noreika by a date on or around Judge Sleet’s retirement.  With the addition of Judges Connolly and Noreika, the Court is back to full strength.

A full copy of the Court’s Announcement is attached hereto.

By Memorandum entered by The Honorable Leonard P. Stark in Westinghouse Air Brake Technologies Corp. v. Siemens Industry Inc., Civil Action No. 17-1687-LPS (D.Del. August 2, 2018), the Court denied Plaintiff Westinghouse Air Brake Technologies Corporation’s (d/b/a Wabtec Corporation) Motion for Preliminary Injunction to enjoin Defendant Siemens Industry, Inc. (“Siemens”) from infringing claims 4, 6 and 24 of U.S. Patent No. 8,478,463 (“the ‘463 patent”) by selling the on-board unit component of Siemens’ positive training control (“PTC”) system, known as Trainguard, in the United States. Following a full evidentiary hearing, the Court denied Wabtec’s Motion for Preliminary Injunction upon concluding that, although Wabtec demonstrated that it will likely prove infringement, Siemens established that it is more likely than not to prove by clear and convincing evidence that the ‘463 patent is invalid in light of the Kull prior art reference. Id. at *2. The Court also concluded that the public interest and the balance of harms weigh more in favor of denying the requested injunctive relief – “as an injunction might cause Siemens to lose the benefit of its substantial investment in developing a competing technology, and because of the harm that would result from altering the status quo of a two-player market.” Id. at *2-3.

A copy of the Memorandum is attached.

By Memorandum and Order entered by The Honorable Gregory M. Sleet in Rothschild Mobile Imaging Innovations, LLC v. Mitek Systems, Inc. et al., Civil Action No. 14-617-GMS (D.Del. July 27, 2018), the Court denied defendant Mitek Systems, Inc.’s motion for attorneys’ fees and expenses pursuant to 35 U.S.C. § 285, 28 U.S.C. § 1927, and the court’s inherent power. Although the parties did not dispute and the Court recognized that Mitek is the prevailing party as required by 35 U.S.C. § 285, the Court denied the motion because it did not find the case to be exceptional. Id. at *6-12. The Court also refused to grant attorneys’ fees or impose sanctions against the losing plaintiff under 28 U.S.C. § 1927, or the court’s inherent power for the same reasons it found the case to not be exceptional. Id. at *12.

Copies of the Memorandum and Order are attached.

By Memorandum Opinion entered by The Honorable Leonard P. Stark in American Axle & Mfg., Inc. v. Neapco Holdings LLC et al., Civil Action No. 15-1168-LPS (D.Del. February 27, 2018), the Court granted Defendants’ Motion for Summary Judgment of Invalidity of U.S. Patent No. 7,774,911 (“the ‘911 patent”) after finding that it was directed to patent ineligible subject matter under 35 U.S.C. §101.

The ‘911 patent relates generally to shaft assemblies for transmitting rotary power in a driveline and more specifically to a method for attenuating driveline vibrations transmitted through a shaft assembly. Id. at *1-2. Many of the prior art liners attenuated the shell mode vibrations but did not also attenuate bending or torsion mode vibrations. Id. at *2. “The ‘911 patent purports to provide ‘an improved method for damping various types of vibrations in a hollow shaft,’ which facilitates the damping of shell mode vibration as well as bending mode vibration and/or torsion mode vibration.” Id.

In applying the two-part framework of the Alice test to the ’911 patent, the Court agreed with Defendants that (1) the claimed methods are simply the application of laws of nature, Hooke’s law, with the result of friction damping; and (2) the claims do not contain an inventive concept. Id. at *9-16. Thus, the Court found that the asserted claims of the ‘911 patent are not patent-eligible under 35 U.S.C. §101. Id. at *15.

A copy of the Memorandum Opinion is attached.

The takeaway is that drafters of patents for processes claiming patent ineligible subject matter – laws of nature, physical phenomena, and abstract ideas – should be mindful that their patent claims contain some additional features or inventive concept that provide practical assurances that the process is more than a drafting effort designed to monopolize the law of nature itself. Parties sued for infringement of patents that arguably involve laws of nature, physical phenomena and/or abstract ideas should carefully evaluate those patents to determine whether they meet the Alice test.

The United States District Court for the District of Delaware has announced new procedures for assignment of cases to Senior Judge Gregory M. Sleet in light of Judge Sleet’s retirement from the bench during the fall of 2018 and two current District Judge vacancies on the Court. With respect to new civil cases, for the time being, Senior Judge Sleet will continue to draw a share of new civil cases equal to that of the Court’s active District Judges. The Court has begun the process of reassigning a portion of the civil cases currently on Judge Sleet’s docket – primarily those scheduled for trial in 2018. With respect to criminal cases, Judge Sleet will no longer be assigned new criminal matters beginning sometime in the spring of 2018. At and after that time, all new criminal cases will be assigned to the Court’s active District Judges.

In the announcement, the Court clarified that the procedures for the assignment of cases to the Vacant Judgeship docket (“VAC”) remain unchanged and no new visiting judges have been added to the list since the September 2017 announcement.

A copy of the Announcement is attached.