SiOnyx, LLC et al. v. Hamamatsu Photonics K.K., et al. (15-cv-13488).

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.

Egenera, Inc. v. Cisco Systems, Inc. (16-cv-11613).

This case involves allegations that Cisco infringed patents related to configuring, deploying and maintaining enterprise and application servers. Earlier in the litigation, the court determined that one of the patents was directed to ineligible subject matter, and Egenera dismissed a second without prejudice following institution of inter partes review. The court held a three day bench trial on the sole issue of whether Peter Schulter, an Egenera employee, should have remained listed as an inventor of the sole remaining patent-in-suit. Schulter was removed as an inventor after Egenera relied on an internal document that predated his being hired to swear behind prior art in the IPR (which, as it turns out, was not instituted with respect to the patent). Judge Stearns found that his removal was improper. He noted that none of the named inventors, including Schulter, reviewed the internal document before signing the declarations that accompanied the change of inventor petition, instead relying on Egenera’s management and counsel that the removal of Schulter was proper.

Later, the court construed the term “logic to modify said receiver to transmit said modified messages to the external communication network and to the external storage network” as a means-plus-function limitation. After reviewing internal documentation, including reviews of Schulter, the court determined that Schulter contributed to the means identified in the specification that were swept into the claim by means of 112(6). Judge Stearns identified passages in the specification that were taken from a state-of-development document authored by Schulter that post-dated Schulter’s employment and to which he contributed. Judge Stearns further considered testimony from one of the other inventors that the last-state-of-development document that pre-dated Schulter’s employment did not include information contained in the patent. Further, Egenera hired Schulter specifically to work on the servers covered by the patent This evidence was sufficient to overcome Schulter’s testimony that he was not an inventor, which was not corroborated by any contemporaneous evidence. As the court had already determined that judicial estoppel prevented Egenera from seeking to re-add Schulter as an inventor, the patent was deemed invalid, closing the case.

SiOnyx, LLC et al. v. Hamamatsu Photonics K.K. et al. (15-cv-13488).

The jury returned a verdict in this long-running saga over black silicon technology that SiOnyx disclosed to Hamamtsu under a nondisclosure agreement, finding that Hamamatsu breached the NDA and was unjustly enriched and awarding $1,377,109 in damages for these claims. They rejected Hamamatsu’s statute of limitations and equitable estoppel defenses. They further determined that SiOnyx employee Dr. Carey should be named as a co-inventor on the Hamamatsu patents-in-suit under 35 U.S.C. § 256. Finally, they determined that Hamamatsu willfully infringed SiOnyx’s patent and that the patent is valid, but awarded no damages for the infringement.

Crane Security Technologies, Inc. et al. v. Rolling Optics AB (14-cv-12428).

The jury reached a verdict on Wednesday in this litigation involving holographic printing patents.  After Rolling Optics suffering a series of setbacks in orders leading up to the trial, the jury determined that Rolling Optics actively induced infringement on all of the accused products, which were imported into the United States by third parties, that Crane had provided actual notice of the infringement in April 2010, and that the infringement was willful.  The jury further found that none of the asserted claims were invalid over the prior art admitted at trial, and that the on-sale bar did not apply to any of the claims.  Finally, damages were pegged at $119,186.  Defenses based on inequitable conduct were previously bifurcated, and remain to be determined.

Crane Security Technologies, Inc. et al. v. Rolling Optics AB (14-cv-12428).

Judge Sorokin precluded Rolling Optics from offering testimony that certain asserted claims are invalid. Defendants did not offer expert opinion that the claims were anticipated by Rowland Technologies patents or products, but sought to elicit non-expert fact testimony from a Rowland representative.  The Court determined that the technology at issue (described briefly here) was too complicated for a jury to understand without expert assistance, and precluded Rolling Optics from presenting any evidence, opinions or argument to the jury on the Rowland technology.  This case is in its fourth day of trial, so I expect to see more from this courtroom.

Shire LLC et al. v. Abhai, LLC (15-cv-13909).

Judge Young issued findings of fact, rulings of law, and an order for judgment following the bench trial in this litigation involving Abhai’s Abbreviated New Drug Application for a generic version of the extended-release ADHD drug Adderall XR.  Judge Young found Abhai infringed Shire’s RE42,096 and RE41,148 patents, and that the patents were valid.  He also determined that Abhai had conducted litigation misconduct in failing to reveal errors in its stability dissolution testing or supplement its discovery  responses with the corrected data in a timely fashion.  Abhai’s 30(b)(6) witness, Dr. Namburi, was deposed in October, 2016, and was questioned at length about the dissolution data, showing how much drug dissolved over time.  This questioning triggered concerns in Dr. Namburi’s mind over the veracity of the test results (and thus of his testimony).  Over the next several days, he and others at Abhai determined that the testing was conducted improperly, as a result of ambiguities in the written protocol Abhai was using.  By the end of the month, the protocols had been revised and the samples retested.  Abhai withheld this revised protocol in discovery responses made in November, and Dr. Namburi did not make note of this error when signing an errata report for his deposition that month.  Abhai also failed to supplement its prior discovery responses to include the revised protocol or new test data, apparently because no one at Abhai informed Abhai’s attorneys of these errors.  Abhai’s attorneys were not notified until March 31, 2017, of the mistakes; the notified the court (and, for the first time, the FDA) the following business day, after five trial days had occurred.  Judge Young determined that Dr. Namburi knew of the importance of the dissolution data to the case, as he was central in assisting Abhai’s attorneys in preparing for the trial, and that as a member of Abhai’s management, his actions were attributable to the company as a whole.  Judge Young ordered sanctions in the form of attorney’s fees for time Shire spent dealing with the inaccurate data and other alleged litigation misconduct, and for dealing with the revised dissolution data that Abhai sought to introduce mid-trial.  He further sanctioned Abhai $30,000 to be paid to the court as a sanction for wasting five days of the court’s valuable time and resources.  Finally, he ordered the clerk to send a certified copy of his opinion to the General Counsel of the FDA for their further consideration.

Milk Street Café, Inc. v. CPK Media, LLC (16-cv-11416).

Milk Street Cafe, a café and catering business located on Milk Street in Boston, sued CPK Media when the latter opened the “Craig Kimball’s Milk Street Kitchen” (they have since dropped the word “Kitchen”), a cooking school also located on Milk Street. Judge Casper last year denied Milk Street Café’s motion for preliminary injunction, finding it had not shown a reasonable likelihood of success. After a bench trial, the court concluded that the defendant had rebutted the presumption of secondary meaning that came with the registration of the mark “Milk Street Café,” based largely on the fact that only the defendant offered consumer survey evidence on this issue.  The court also determined that there was no likelihood of confusion, in part because the only real similarity of the marks was the phrase “Milk Street” in which Milk Street Café had no trademark rights and because the goods and services – breakfast and lunch restaurant and corporate catering by Milk Street Café versus cooking demonstrations and classes by the defendant – were not similar.  Judge Casper found no trademark infringement, no false association, and no unfair competition.  He did, however, refuse to cancel Milk Street Café’s trademark registration, finding the defendant had not shown that it would be damaged by the continued registration of the mark.