Judge Saris denied defendant NetApp’s motion for leave to amend and supplement its invalidity contentions for failure to demonstrate good cause as required by the local rules. NetApp, who was sued separately from Lenovo and EMC but whose case was joined, failed to connect its proposed amendment to the claim construction ruling, and waited a year between discovering the new prior art and seeking to amend. Given this, and that fact discovery is now complete and expert disclosures are imminently due, Judge Saris determined that the case “is aging and needs resolution.”
CadioNet sought to sever the patents that were found to be directed to ineligible subject matter from the remainder of the case, which remains to go to trial, so that the ruling on the two patents could be immediately appealed. Judge Talwani determined that, given the posture of the case, Fed. R. Civ. P. 54(b) should apply, rather than Rule 21 as had been argued by CardioNet. Noting the “long-settled and prudential policy against the scattershot disposition of litigation,” Judge Talwani determined that CardioNet’s decision to bring all four patent claims in a single action, “presumably based on its view that the claims are related and involve common sets of fact and law,” mitigate against entry of separate judgment on the two invalidated patents. She did note that CardioNet had a different pair of related patents that were invalidated on Alice grounds at the District Court level (also by Judge Talwani), and that she would likely have granted severance if CardioNet had sought it at the time the appeal on those patents was filed; but as the appeal in that case has been fully briefed, severing the claims in the current case would result in three different litigation tracks. Accordingly, CardioNet’s motion to sever was denied.
Following the Federal Circuit’s affirmance of JMOL that the patent-in-suit was not infringed, Perrigo sought $90,637.02 in costs. Brigham and Women’s objected to virtually all of the requested costs and asserted that the case should be treated as a “mixed-result” case because Brigham “prevailed” on every issue save infringement (i.e., prevailed on standing, laches, invalidity, marking and damages). Judge Zobel rejected this argument, finding that Brigham had not prevailed on its sole claim of infringement and that, as a result, Perrigo was entitled to costs under F.R.C.P. 54(d). Judge Zobel did not award the full amount sought, however; she denied pro hac vice motion fees as not allowable in this district, denied costs associated with depositions that were not used in trial or in the post-trial briefing and denied all costs associated with videotaping or obtaining rough transcripts, finding these costs were not taxable absent prior permission. She also denied costs associated with the use of realtime transcripts, finding these to also not be “necessary” within the meaning of 28 U.S.C. § 1920(2). Judge Zobel refused to award $35,298 in costs associated with the use of a graphic designer to prepare charts, figures and demonstratives used at trial, based on both the excess amount of time spent in their preparation and a lack of evidence supporting these costs. Finally, Brigham’s had, in its motion seeking refusal of the Bill of Costs, sought expert witness fees under F.R.C.P. 26(b)(4)(E), which generally requires a party seeking expert discovery to pay the expert for the time spent in responding. Judge Zobel noted that expert discovery had concluded three years earlier with neither party seeking fees, and denied the request as untimely. In total, she awarded $22,843.48 to Perrigo.
Judge Stearns denied Cisco’s motion for attorneys’ fees under § 285. Cisco asserted that the case became exceptional on August 17, 2016, when Egenera, in a parallel IPR proceeding, submitted a declaration from one of its employees stating that he had been erroneously named as an inventor. Egenera removed him as an inventor so that it could rely on an internal document that pre-dated his employment to swear behind a reference. The patent was subsequently invalidated for failure to name all inventors when Judge Stearns construed the claims and determined that the employee had made an inventive contribution. According to Cisco, Egenera at that point had thoroughly reviewed the inventorship issue and should have realized, at least as of the claim construction order, that the employee was improperly removed. While agreeing that Egenera’s investigation was “wanting,” Judge Stearns found that the survival of the inventorship dispute through summary judgment meant that the case did not rise to exceptional.
Cisco’s Bill of Costs was denied in part. He allowed costs related to professionally produced video deposition clips and trial demonstratives, noting that the prevalence of witness credibility issues necessitated their use, but found the requested amount of $60,341 for a three-day trial excessive by half. He further cut summons and subpoena costs to eliminate the excess fees charged for emergency or urgent service.
This is the second case I have seen in recent days in which exceptionality was tied to amenability to summary judgment – Judge Saylor denied a request for fees because the plaintiff had not sought summary judgment. I do not that the grant of summary judgment does not automatically result in a finding of exceptionality, however, and hope that this recent small trend does not become a de facto precedent for the award of attorneys’ fees, as I can envision cases that, while having issues of fact in dispute, still rise to the level of exceptionality, and would hate to see arguments to that effect precluded.
Closing out this dispute, at least at the District Court, Final Judgement was entered awarding SiOnyx:
- $1,377,109 in contractual and unjust enrichment damages plus $1,752,017 in pre-judgment interest for a total of $3,129,126;
- post-judgment interest at 2.4% pursuant to 28 U.S.C. §1961, with an accounting of post-verdict sales to occur;
- judgment that the ‘467 patent was willfully infringed;
- addition of Dr. James Carey as co-inventor of the ‘467 patent;
- ownership of nine U.S. patents; and
- a permanent injunction barring infringement of all ten patents by Hamamatsu.
Let the appellate process begin…
Following trial, Judge Saylor dealt with a number of post-trial motions. He granted SiOnyx’s motion for equitable relief, awarding ownership of the nine patents in dispute to SiOnyx and ordering Hamamatsu to take all necessary steps to correct ownership of the patents. This was based on the non-disclosure agreement that a jury found to have been violated, that provided for ownership of all patent rights arising from the confidential information SiOnyx disclosed to Hamamatsu when exploring a possible business relationship. While the SiOnyx employee who took part in the disclosure was found to be only a con-inventor (along with Hamamatsu personnel), Judge Saylor noted that the non-disclosure agreement expressly provided ownership in the resulting ideas to SiOnyx. Judge Saylor further granted an injunction prohibiting Hamamatsu from making, using, selling, offering for sale, or importing accused products based on language in the NDA that explicitly provided for injunctive relief in the event of breach as well as on SiOnyx’s ownership of the patents, one of which the jury found to be infringed.
Judge Saylor denied Hamamatsu’s motion for judgment as a matter of law, finding that the statute of limitations did not bar suit on the NDA. He noted that this is generally a jury decision, and that there was no reason to overturn the jury’s verdict on this issue. He further refused to modify the unjust enrichment award to stop damages from accruing after the NDA expired, finding that the jury reasonably concluded that post-expiration damages flowed from pre-expiration conduct in designing the accused products.
The rulings were not all bad for Hamamatsu. Judge Saylor treated SiOnyx’s motion to amend the judgement to have their employee deemed the sole inventor on the patents in suit (filed prematurely) as a motion for judgment as a matter of law and denied it. SiOnyx contended that a jury instruction erroneously stated that the method of forming a claimed aspect of the invention was irrelevant, but Judge Saylor determined that, having failed to object to the instruction prior to the jury retiring under Fed. R. Civ. P. 51, SiOnyx had waived the argument, and further that SiOnyx could not raise the issue because it was not argued in SiOnyx’s motion for a directed verdict. Accordingly, Hamamatsu employees remain co-inventors.
Judge Saylor also denied SiOnyx’s motion for fees for an exceptional case. He noted that, while SiOnyx alleged Hamamatsu’s invalidity and non-infringement defenses to be substantively too weak to merit litigating, SiOnyx did not seek summary judgment on either issue. He further found no evidence that Hamamatsu deliberately sought to increase the cost and complexity of the litigation for an improper purpose.
Finally, Judge Saylor denied SiOnyx’s motion for enhanced damages pursuant to 35 U.S.C. 284, which allows the court to assess damages when not found by the jury. Here, the jury awarded damages for breach of contract and unjust enrichment, but awarded $0 in patent damages despite finding willful infringement. SiOnyx contended that the $0 award was, in effect, the jury not “finding” damages pursuant to the statute, permitting the judge to do so. Judge Saylor disagreed, noting that SiOnyx’s damages expert told the jury that there may be overlap between the breach of contract damages and infringement damages, and that the jury might need to choose between the two. Given this, and given the fact that the jury was told not to award duplicative damages, it is reasonable to interpret the $0 infringement award to mean that the infringement damages were covered by the breach of contract damage award. Judge Saylor further refused to treble the damages, since there was no way to accurately determine the level of damages attributable to infringement.
If anyone is wondering why patent litigation is so expensive, note that this case was filed in November 2015, and included significant motion practice and discovery disputes to get to this point, including 70 docket entries just to get to the filing of an answer to the complaint (with motions to dismiss, contesting adequacy of service, and for a preliminary injunction intervening). The case took almost two years to get to a claim construction order, and almost another two years to get to trial, and the matter is just now coming due for appeal. While this case involved additional issues beyond mere patent claims, this is not an unusual time-frame for patent litigation, and helps explain the costs involved.
New England Wheels (“NEW”), a Billerica business that (among other things) retrofits vehicles for disabled drivers and passengers, seeks a declaration that it does not infringe two patents directed to retrofitting sliding doors in vans. Delphini, whom NEW asserts to be a non-practicing entity, first asserted these patents by sending a cease and desist letter in June 2019, accusing NEW’s Ford Transit, Ram Promaster, and Mercedes-Benz Sprinter retrofitted vans of infringing the two patents, but identifying no specific claims alleged to be infringed and providing no infringement analysis. As NEW had already moved away from retrofitting van doors, agreed to remove the portions of their website showing such and to cease and desist with so doing moving forward. Undeterred, Delphini responded by demanding a full accounting for past work, which NEW asserts is prohibited due to lack of notice that would preclude past damages. NEW noted that it had been retrofitting van doors since 2007, well before the patents were filed. NEW further noted that Delphini had sent cease and desist letters to other entities, using images from NEW’s website of both accused and un-accused products as proof of infringement, and demanded Delphini stop with this practice. When Delphini again responded with a demand for an accounting dating to the publication date of the earlier patent, NEW filed the instant declaratory judgment action, seeking a declaration that the two patents are invalid and not infringed and alleging tortious interference with advantageous business relations based on Delphini’s having sent cease and desist letters to customers and potential customers of NEW that included photographs of a new NEW product, the “Frontrunner” bus, suggesting that the bus infringes, despite Delphini having acknowledged to NEW that the Frontrunner does not infringe.