Judge Stearns denied Samsung’s motion to dismiss for failure to state a claim, agreeing that the complaint meets the Twombly “plausibility” standard because it states the patents alleged to be infringed and the acts by which they are allegedly infringed. Rain Computing asserts that Samsung’s delivery of their apps to end user devices via an app store that requires registration and subscription to use, which are asserted to infringe Rain’s patent directed to methods and systems for delivering software to client terminals based on a subscription service. Judge Stearns held that the Federal Rules of Civil Procedure, even as explained by Twombly, “do not require a plaintiff to plead facts establishing that each element of an asserted claim is met.” This holding seems to be inconsistent with a pair of prior D. Mass. cases (Rampage v. Global Graphics, Judge Burroughs, and Sunrise Techs. V. Cimcon Lighting, Judge Gorton) that held that a patent plaintiff “must allege that defendant’s product practices all the elements of at least one of the claims of the subject patent.” It will be interesting to see whether Samsung will challenge this decision down the road.
After photographer Alexander Stross sued Ivymedia for copyright infringement relating to IvyMedia’s alleged use of a Stross photograph in its on-line advertising, Judge Sorokin denied IvyMedia’s motion to dismiss for failure to state a claim on which relief could be granted. IvyMedia subsequently answered and counterclaimed for extortion and fraud. Stross moved to dismiss the counterclaims as being legally and factually baseless and designed to drive up the costs of litigation. Stross further sought an award of attorneys’ fees as a sanction for IvyMedia’s continued baseless motion practice. Judge Sorokin granted Stross’ motions and awarded Stross $9671.09 in fees and costs in connection with the motion to dismiss.
Judge Talwani granted Infobionic’s motion to dismiss, finding the claims in suit were directed to patent-inelligible subject matter. CardioNet accused Infobionic of infringing U.S. Patent 7,941,207, titled “Cardiac Monitoring,” by sales of its MoMe Kardia System. The patent concerns monitoring electrical activity of the heart to identify atrial fibrillation and atrial flutter, two forms of arrhythmia, in ambulatory (i.e., not bed-ridden) patients. Judge Talwani noted that dismissals founded on § 101 invalidity were approved by the Federal Circuit in their 2018 Aatrix Software decision, applying the non-moving party’s proposed claim construction where construction is necessary. Here, Judge Talwani found the claims were directed to the abstract idea of looking at the variability in time between heartbeats and taking into account ventricular beats, a method of diagnosis that had long been used, and that the claims merely applied conventional computer components to that idea. She rejected CardioNet’s argument that the improvement to the field of cardiac telemetry necessarily translated into an improvement in computerized technology that would take the claims out of the Alice analysis. Having determined that the claims are directed to a natural phenomenon under the first step of the Alice, Judge Talwani went on to find that the algorithms used in the analysis would not suffice to result in eligibility, because Alice forceloses eligibility based on the implementation of a mathematical principal on a computer. The claims themselves used terms like “variability determination logic” and “relevance determination logic;” Judge Talwani noted that CadioNet failed to identify what aspect of these logic systems described in the specification made the claims patent-eligible, and further noted that “determination logic” is not defined or used in the specification. As such, it would cover any form of logic, and provides no meaningful limitation on the claims that would render them eligible. Accordingly, the complaint was dismissed.
Nike sued Puma for infringement of seven Nike patents covering shoes having knitted upper, and alleged that after it notified Puma about the patents prior to filing suit, Puma not only failed to cease making and selling the accused products, Puma also introduced new shoes to the market that infringed the patents. Puma moved to dismiss the claims with respect to two of the patents as directed to non-patentable subject matter, asserting that one was directed to the abstract idea of forming an outline pattern on a textile and does not disclose an inventive step towards achieving the outline pattern, and that the second is directed to the abstract idea of generating a visual pattern on a textile, which is nothing more than a non-patentable work of art. Judge Sorokin disagreed, finding that the claims, which were directed to tangible manufactured items (i.e., shoes) or to physical components thereof or methods of manufacturing the same, they passed muster under the first prong of the Mayo test as being directed to a statutorily provided category of patent-eligible subject matter. He further noted that, even if they did not, Puma had not met its burden of demonstrating by clear and convincing evidence that the claims lacked an inventive step that would meet the second prong of the Mayo test. Judge Sorokin also denied Puma’s motion to dismiss the willfulness charges, finding Puma’s suggestion that more must be pled than knowledge of the patent and continued infringement remained an open question (albeit one that other Massachusetts judges had found incorrect), but that Nike had sufficiently pled additional facts that would support a finding of willfulness.
Global accused Eric Arthur and Marketing Sales Concepts of infringing its “ONE” mark and a design patent for condom packaging, and the Defendants moved to dismiss for lack of personal jurisdiction and improper venue, contending that they do no business in Massachusetts and never marketed or sold the accused condoms in the Commonwealth. Global responded that the defendants’ websites and social media presence, accessible in Massachusetts, supported jurisdiction and that the patent claim could be brought in Massachusetts under the “pendent venue” doctrine. Judge Stearns found that under TC Heartland, pendant venue cannot be applied to patent infringement claims (but note that at least one other Court has found that pendent venue is applicable to patent infringement claims); he decided, however, to transfer the entire matter to the Western District of Arkansas rather than to dismiss the complaint outright.
Oxford, a Massachusetts LLC with places of business throughout the country, hired Jeremy Hernandez to work as an account manager in its Campbell, California office. Hernandez signed an employee Confidentiality, Non-Solicitation and Non-Competition Agreement that included an agreement that any disputes arising thereunder would be governed by Massachusetts law and that any lawsuit would be brought in a Massachusetts court. As a part of his employment, Hernandez was given access to the “Oxford Database,” a secure database of client information. After Hernandez left his employment, Oxford became aware that Hernandez was soliciting Oxford customers and allegedly had brought confidential information of Oxford to his new employers. After Oxford filed suit in Massachusetts state court, Hernandez moved to dismiss or transfer under the doctrine of forum non conveniens. The SJC first determined that California and not Massachusetts, law should apply despite the language of the agreement. Where a choice of law provision is executed, Massachusetts will uphold the provision unless it is contrary to public policy, which will be found where the application of Massachusetts law would be contrary to a fundamental policy of a state having a materially greater interest in the issue than Massachusetts and would be the law that applied in the absence of the choice of law provision. California has a settled policy in favor of open competition and employee mobility that, among other things, prohibits non-solicitation clauses and provides a statutory remedy to employees where an employer tries to enforce a non-competition or non-solicitation clause. Applying Massachusetts law would run contrary to this policy, and with the exception of Oxford’s place of incorporation, all relevant events occurred in California – Hernandez applied for the job, executed the agreement, worked for Oxford, and allegedly breached the agreement in California. Accordingly, applying Massachusetts substantive law would run afoul of a fundamental policy of California, and the SJC determined that the choice of law provision was unenforceable and California law would apply. Having so determined, the SJC next addressed the non conveniens argument, and held that an agreement to have suit brought in Massachusetts cannot preclude a non conveniens challenge as a matter of law. Noting that all relevant witnesses were in California and could not be compelled to appear in Massachusetts for trial , and that the case would involve interpretation of recently-passed California laws relating to employee agreements, the SJC decided that the California court would be in the best position to address the factual issues and consider the evolution of the interpretation of the new law, and dismissed the Massachusetts complaint so that it could be brought in California.
This case creates a new concern for multi-state corporations seeking to impose restrictions on employees in other states that, while acceptable in Massachusetts, might run afoul of the laws of the states in which the employees work. Businesses should review the employment laws of states in which they employ people and consider whether a choice of law clause will be upheld in light of the SJC’s decision.
After being sued for patent infringement by Maquet, Abiomed filed non-infringement counterclaims against Maquet its corporate parent, Swedish company Getinge AB. Judge Saylor granted Getinge’s motion to dismiss, agreeing that Getinge lacks standing to sue Abiomed and determining that this insulates Getinge from the declaratory judgment counterclaim. Judge Saylor noted that the counterclaim does not allege that a written agreement exists by which Getinge was given any rights in the subject patent, and absent a written transfer of rights, Getinge can have no rights in the patent. He refused to extend the doctrine of equitable title, stating that there is nothing inherently unfair or inequitable in a corporate subsidiary owning all rights in a patent or in the parent then exercising substantial control over the subsidiary that would require bringing the parent into the controversy. Accordingly, the counterclaim was dismissed as applied to Getinge (although it remains in place against Maquet).