Defendant Not "Entitled" to Discovery on Claim For Section 285 Fees

In a case where the underlying claims of infringement were dismissed voluntarily under Rule 41, Judge Jones recently ordered that a defendant was not entitled to take discovery in order to support a theory that the case was "exceptional" under 35 USC Section 285.

From Judge Jones' order:

G-J appears to concede that it cannot substantiate its § 285 attorney fee request
without additional discovery. G-J will apparently base its § 285 request solely on its
allegations of inequitable conduct. See Dkt. # 46 at 7 (stating that G-J “is willing to
forego, without prejudice, its declaratory judgment claims of noninfringement and
invalidity, and to focus discovery and proceedings on the inequitable conduct claim”);
Dkt. # 55 at 7 (“G-J has already agreed to shorten and simplify this case by focusing
discovery on its inequitable conduct claim.”). G-J complains, however, that it “has not
been given the chance to substantiate its claims,” and that the court should permit it to
take discovery for that purpose. Dkt. # 46 at 9.


The court finds no merit in G-J’s contention that the mere fact that it has
counterclaims pending entitles it to discovery. The court has broad discretion to control
the scope of discovery. See Childress v. Darby Lumber, Inc., 357 F.3d 1000, 1009 (9th
Cir. 2004); see also Fed. R. Civ. P. 26(b)(1). The court’s April 23 order established that
the scope of the declaratory judgment counterclaims was no more extensive than the
scope of G-J’s request for § 285 attorney fees. The court will limit discovery in
accordance with the scope of the counterclaims.

***


[T]he court noted that it could have dismissed G-J’s counterclaims, retaining jurisdiction solely “to enter declaratory relief as appropriate in resolving G-J’s request under § 285.” Id. at 12 n.5.


judgejonesorderon285.pdf

Seattle Patent Litigation Update: August, 2008

While August was a relatively slow month for new cases in Seattle (only one, Laughing Rabbit Inc. v. OpticsPlanet, Inc (08-01176 JLR), area technology companies were busy elsewhere dealing with a variety of patent issues. Notably, Microsoft settled its dispute with Immersion Corp, obtaining a one-time payment of $20.75 M. The settlement resolves a contract dispute stemming from patent litigation Immersion won against Sony Corp over game controllers with so-called "rumble" or "haptic" technology (vibrating controllers, set to move in response to on-screen gaming events, like an explosion or car crash). Immersion sued Sony in 2004 in the ND of California. The suit targeted Sony's Playstation and Playstation 2, as well as Microsoft's X-Box controllers. In 2005, Microsoft and Immersion entered into a sublicense agreement as part of a $26 M settlement, where Microsoft paid Immersion $20 M to obtain licensing rights to the technology and $6 M to buy a 10% stake in the company. Microsoft's 10% stake became pretty valuable when Sony agreed to pay Immersion more than $150 M to settle remaining claims for infringement. Last month's payment resolved any remaining interest Microsoft had in proceeds from this patent litigation. Overall, one might say that Microsoft settled this dispute for $6M (but I have no idea whether Microsoft expects any more return on its 10% "investment" in Immersion ... Regardless, this is definitely some creative lawyering at work. ... Hats off to lawyers for MSFT).

In other Microsoft patent news from last month, Portland-based patent law blogger, Gary "Patent Hawk" Odom, author of The Patent Prospector, sued Microsoft in East Texas, alleging Infringement of his patent for "Tool Group Manipulations," US Pat. No. 7,363,592. (Complaint available here) Patent Hawk is represented by Susman Godfrey, among three other law firms and no fewer than 10 lawyers, including the Susman firm's Seattle-based patent litigators, Brooke Taylor and Genevieve Vose. The suit was filed in Tyler, TX, but it is not likely to get to trial very quickly there. The Texas Rocket Dockets (even Tyler's) are not as speedy as they once were.

Nintendo was also busy last month. It was dealt a one-two punch: (1) ITC investigation and (2) Federal Court patent litigation in USDC, Northern District of Maryland, both stemming from allegations that the Wii infringes certain patents owned by Hillcrest Laboratories, Inc. Hillcrest owns US Patent Nos. 7,158,118; 7,262,760; and 7,414,611, which allegedly cover a technology used on TV sets for user access to digital content like photographs, web sites, and games. The software typically uses a main menu that prompts users to choose which program they want to use. Hmmm, sounds like my Apple TV. Hillcrest also asserts infringement of US Patent No. 7,139,983, a patent alleged to cover hand-held three dimensional pointing devices that (unlike a traditional mouse) allow a user to translate or rotate the pointing tool in space instead of merely detecting movement relative to a flat surface.

Hillcrest is a different sort of plaintiff than Nintendo is perhaps used to (at least during the "modern age" of patent litigation, i.e., since about 2004). Hillcrest makes products and is relying on US trade law to seek a general exclusion order barring importation of any product infringing its US patents; this would apply to any importer of such products, so this case has implications beyond the immediate parties. Nintendo can stay litigation in Maryland district court or decide to proceed along parallel tracks in both US District court and the ITC. Things will move fast in the ITC, not as fast as they used to, but considerably faster than they will move in USDC in Maryland. It will be interesting from a strategy perspective to see which route Nintendo chooses to go. So far, no filings have been made by Nintendo in the district court litigation.

Finally, I was catching up on some of the cases that I've written about, and I noticed that in July, Judge Jones agreed to consolidate three cases brought by Unigen Pharmaceuticals over US Patent No. 7,192,611, a patent covering methods for treating osteoarthritis. Unigen sued Walgreens and others for selling an herbal supplement that is a blend of flavans from Acacia catechu and flavanoids from Chinese Skullcap (Scutellaria Baicalensis). Unigen markets this herbal supplement under the mark Univestin. Walgreens filed a motion for summary judgment seeking to invalidate the '611 patent in view of US Patent No. 5,650,433. Judge Jones has a standing order explaining that he normally does not entertain summary judgment motions that implicate claims construction issues until after Markman briefing and (if necessary) a Markman hearing and decision on claim construction. In view of this order, Judge Jones asked for a claims construction "proffer" from Unigen, saying that it would be accepted as true for purposes of summary judgment and limited only by counsel's obligations to have a good faith basis for the construction, consistent with Rule 11. My earlier post explains this in better detail.
Well, Unigen submitted its proffer, and this was accepted by Judge Jones and held sufficient to create a genuine issue of material fact, and hence, order denying summary judgment (at least for now). From Judge Jones' Order:

[T]he court notes that the parties’ evidence shows that osteoarthritis itself is a degradation of joint cartilage.The symptoms of osteoarthritis, or the effects of that degradation, include inflammation and pain. COX-2 is the shorthand name of an enzyme that promotes inflammation. Treatments that target COX-2 seek to inhibit its production to produce an
anti-inflammatory effect.

For each of the independent claims, Unigen proposes a construction that not only
makes each preamble a claim limitation, it makes each preamble a claim limitation with
meaning beyond its plain language. See Philips v. AWH Corp., 415 F.3d 1303, 1313
(Fed. Cir. 2005) (noting that claim terms must be construed according to their “ordinary
and customary meaning” to a person of skill in the art). The “method for treating
osteoarthritis” of claims 1 and 8 becomes a “method for alleviating those symptoms of
osteoarthritis that result from COX-2 mediated inflammation.” The “method for
improving impairments . . . in a living host having arthritis” of claim 15 becomes a
“method for improving impairments . . . that result from COX-2 mediated inflammation
in a living host having osteoarthritis.” The “effective amount” and “host in need thereof”
limitations that follow the preambles of the independent claims are similarly imbued with
meanings that limit them to targeting COX-2 mediated inflammation.

Accepting this claim construction, there is no clear and convincing evidence that
the ‘433 Patent anticipates the ‘611 Patent. The ‘433 Patent is targeted at protecting
cartilage (“chondroprotection”), not at COX-2 mediated inflammation. Indeed, the ‘433
Patent teaches away from anti-inflammatory treatment, noting that “conventional
analgesic and anti-inflammatory agents . . . were not effective against the destruction of
the articular cartilage, and in fact sometimes exhibited adverse effect . . . .” ‘433 Patent
at 1:36-40. If Unigen correctly construes the ‘611 Patent to require a method that targets
COX-2 mediated inflammation, then Walgreen has not provided uncontroverted clear and
convincing evidence that the ‘433 Patent is anticipatory prior art.1
It appears, then, that Unigen’s construction of the independent claims of the ‘611
Patent as limited to targeting COX-2 mediated inflammation is critical to sustaining the
validity of the patent. Expeditiously resolving that dispute may be key in efficiently
resolving these consolidated actions.

That's all for now.

Judge Jones Accepts Claim Interpretation "Proffer" on Motion for Summary Judgment

Judge Jones is one of our district's newest federal judges. In a recent order in Unigen Pharmaceuticals Inc. v. Walgreen Company (07-047-RAJ), he offers some new ideas for dealing with early summary judgment motions in a patent case, i.e., summary judgment motions filed before any substantive claim construction briefing. This dispute involves U.S. Patent No. 7,192,611, a patent for the "Identification of Free-B-Ring Flavanoids as Potent Cox-2 Inhibitors."

Walgreens alleges that the patent is invalid in view of United States Patent No. 5,650,433 and they filed a summary judgment motion asking the judge to dispense with complex claim interpretation and invalidate the patent under section 102(b). After noting that "determining the validity of a patent before construing its claims is improper" (citing Akamai Techs., Inc. v. Cable & Wireless Internet Servs., Inc., Inc., 344 F.3d 1186, 1195 n.4 (Fed Cir. 2003)), Judge Jones stated that "the apparent similarity between the ‘433 Patent and the patent-in-suit suggests that the court may more efficiently resolve this dispute by considering Walgreen’s motion in advance of formal claim construction." To this end, Judge Jones ordered plaintiff "to submit, within two weeks of this order, a proposed claim construction for each of the asserted claims of the patent-in-suit. Unigen should not offer argument in favor [of] its proposed claim construction, but should ensure that it submits sufficient explanation to permit the court to understand its proposed claim construction. Unigen will not be bound by its proposed claim construction except in the court’s consideration of the motions before it. Unigen may advance a different interpretation of its claims during the formal claim construction in this litigation. The
only requirement the court places upon the claim construction that Unigen submits in response to this order is that it be in good faith, consistent with the requirements of Fed. R. Civ. P. 11. The purpose of this order is to permit Unigen to propose a favorable, good-faith claim construction to avoid any prejudice that might otherwise arise from considering an invalidity motion in advance of formal claim construction."

Essentially, the order asks for a "proffer" from plaintiff concerning a "favorable, good-faith claim construction." Presumably, if Plaintiffs can offer a construction in good faith that avoids anticipation, Judge Jones will deny the motion.

Unigen asked for reconsideration of this order, arguing that the court should just delay consideration of Walgreen's motion until such time that it has an opportunity to construe the claims. Judge Jones denied this motion, stating "The court’s admonition that Plaintiff should not offer argument in support of its proposed claim construction is not a limitation on Plaintiff’s ability to advance its cause. Plaintiff should not offer argument in support of its proposed claim instruction because the court will accept Plaintiff’s proposed claim construction for purposes of resolving the summary judgment motion, and thus argument is not necessary. As stated in the prior order, the court encourages Plaintiff to provide an explanation of its proposed claim construction that will permit the court to apply that claim construction in resolving the summary judgment motion. That explanation should be sufficient to permit the court to consider the patent-in-suit through the eyes of a person of ordinary skill in the art."

This new approach to resolving early summary judgment motions raises some interesting issues. If plaintiff is unable to proffer a construction in good faith that avoids anticipation, is it proper then to dismiss its claims without formal claim construction, a result that seems to conflict with the Federal Circuit's rule in Akamai Techs., 344 F.3d at 1195 n.4? Further, what credit does this process provide to the rule that claims construction is (at least for the moment) a question of law for the Court, subject to de novo review? Is it ever proper procedure for the court to dispense with formal claim construction in order to resolve a properly filed motion for summary judgment in patent case? All open questions.

JudgeJonesORderRenotingMotionSJ.pdf

JudgeJonesMreconsider.pdf

Judge%20JonesSJ.pdf

Judge Jones Scheduling Order for Patent Cases

Here is a recent scheduling order issued by our newest judge, Judge Jones, who seems to have been assigned quite a few patent cases by his fellow jurists. In addition to this case, Judge Jones is currently presiding over the Canon USA inc et al. v. Screentone Systems Corporation (o7-1544), a case involving almost every major printer manufacturer, concerning methods and systems of half-toning in computer printers, US Pat. 5,166,809, with related cases pending in Eastern Texas, the District of Delaware, and motions for consolidation and transfer before the Panel for Multi District Litigation (MDL No. 1926, In re Halftone Color Separations).
Judge%20Jones%20Scheduling%20Order.pdf

Judge Jones Denies Motion for Staged Discovery

By itself, this recent order from Judge Jones denying staged discovery in a patent case seems pretty insignificant. And it probably is. The only reason I'm posting it is because it is one of his first orders in a patent case (if not the first order) so it has some significance in that regard. Further, it provides information for those practicing in his court and considering staged discovery. In this case, Defendant Eveready Industrial Services Corp. sought to stay all discovery in the case except that which related to an alleged assignment. Judge Jones denied the request.

From Judge Jones' order:

"Eveready seeks to postpone discovery on all issues save one: whether Eveready is the assignee of rights under the joint technology agreement. Eveready asserts that resolving this issue may dispose of the case. Unfortunately, Eveready does not explain why. Plaintiffs’ amended complaint contains six causes of action, and Eveready fails to explain how deciding whether it is the assignee of the joint technology agreement will resolve each cause of action. In opposition, Plaintiffs explain that the resolution of the assignment question will not resolve many of its claims."
EvereadyOrderStagedDiscovery.pdf