A Blog About Intellectual Property Litigation and the District of Delaware


The True Protagonist of Delaware's Redaction Saga

Nathan R. Hoeschen, March 16, 2023
Redactions

As Judge Connolly famously noted in his "star chamber" opinion, part of the reason over-redaction is a problem is that the parties themselves have no real incentive to challenge one another on the issue. It's akin to a tragedy of the commons scenario, but worse—the parties suffer no adverse consequences from the redactions at all, because they can see all of the filings, it is only the public at large that is left with questions.

This unfortunate equilibrium is disrupted, however, when a third party requests unsealing.

It Is I, an Interested Third Party!
It Is I, an Interested Third Party! AI-Generated, displayed with permission

That's exactly what happened this week in United States of America v. Gilead Sciences, Inc., C.A No. 19-2103-MN. For those who haven't been following this fascinating case, the CDC has various patents on an HIV prophylaxis regimen (known as PrEP in the biz), following years of research into the issue. Gilead markets two blockbuster PrEP drugs—Truvada and Descovy—which the government alleges infringe those patents. The Complaint is rife with allegations that Gilead has been gouging customers with its pricing for these allegedly infringing drugs. See D.I. 1 at 48-49 ("Another critical barrier to increasing access to PrEP in the United States has been
the cost of Truvada®, which presently is only sold by Gilead"; "Many AIDS activists and many in the medical community have criticized Truvada’s price in the United States, particularly in light of HHS’s patents, the Government’s funding of clinical research on PrEP, and the relatively low cost at which Gilead apparently makes the product").

TL;DR, the case is a big deal even to normies. So, it probably shouldn't have come as a huge surprise when ...

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Opinion: The Third Circuit's Proposed 5 p.m. Filing Deadline Is a Good Idea and the Arguments to the Contrary Are Wrong

Andrew E. Russell, March 15, 2023
Filing Deadline

Hourglass
Aron Visuals, Unsplash

The Third Circuit Court of Appeals announced a proposed rule change recently that implements a 5 p.m. filing deadline:

26.1 Date of Filing and “Last Day”/ Deadline for Filing
Documents received by the Clerk by 5:00 p.m. Eastern Time will be filed as of the day of receipt and documents received after 5:00 p.m. will be filed as of the next day the clerk’s office is open, regardless of the means of transmission (electronic filing or otherwise). Documents received by 5:00 p.m. Eastern Time on the last day for filing will be considered timely filed, unless a different time is set by a statute, local rule, or court order. Documents received after 5:00 p.m. Eastern Time …
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Claim Narrow, Claim Broad

Nathan R. Hoeschen, March 14, 2023
Claim Narrowing

This morning I woke up and everything hurt. It was cold, and my old house made a sound like a sad kazoo with every mournful gust of wind. I'm still working out the physics of that last bit. As I sat down to my porridge, I admitted to myself that I was old.

More than usually cursed art (FYI, it's supposed to be a kazoo)
AI-Generated, displayed with permission

Anyway.

All this is to say that I felt like nothing was going my way. So I empathized with the filers of a seemingly simple stipulation in Cleveland Medical Devices, Inc. v. ResMed Inc., C.A. No. 22-794-GBW.

The scheduling order there differed from Judge Williams' form in that it added a specific provision for the reduction of prior art, limiting the number of claims asserted for each patent, as well as the number of prior art references for each patent:

The parties shall reduce the number of asserted claims and asserted prior art used for anticipation and obviousness combinations as follows:
• On January 9, 2023 . . . Plaintiff shall serve an Initial Election of Asserted Claims, which shall identify no more than 64 total asserted claims, and no more than 10 asserted claims per patent.
• On February 8,2023 . . ., Defendant shall serve an Initial Election of Prior Art, which shall identify no more than 64 total references and no more than 10 references per patent that can be used for anticipation or as combinations for obviousness . . .

Id. at D.I. 41 Paragraph 3(g).

Later, the parties had a dispute over the per-patent cap ...

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Judge Fallon Denies Discovery on Unlaunched, Abandoned, and Future Products—But Defendant Can't Redact That Information from Otherwise Responsive Docs

Andrew E. Russell, March 13, 2023
Document Production Accused Products

Abandoned
Cédric Dhaenens, Unsplash

Judge Fallon made an opinion public today that deals with whether a plaintiff can get discovery on unlaunched, abandoned, and future products in the lead up to a preliminary injunction hearing. The Court held that discovery on those products was not proportional to the needs of the case:

Zwift has shown that the document discovery requested by Wahoo is not proportional to the needs of the case at this stage of the proceedings. (D.I. 72) The complaint establishes that Wahoo was aware of Zwift’s unlaunched and abandoned hardware products, yet it did not raise these products in its motion for a preliminary injunction, indicating that the relevance of the requested discovery to the preliminary injunction inquiry …
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A Vacated Trial Win May Not Show a Likelihood of Success—Even a $237 Million One

Andrew E. Russell, March 10, 2023
Standing Preliminary Injunction

Photograph of all of plaintiff's likelihood of success arguments securely located in one basket.
Photograph of all of plaintiff's likelihood of success arguments securely located in one basket. Court, Unsplash

Judge Williams ruled on a preliminary judgment motion yesterday in Cirba Inc. v. VMWare, Inc., C.A. No. 19-742-GBW (D. Del. Mar. 9, 2023). In that case, the plaintiff had originally gone to trial back in 2020, and won a $237 million jury verdict, plus a jury finding of willful infringement. Id., D.I. 550 at 6.

The Court previously vacated that win, however, because it turns out that one of the plaintiffs, Cirba Inc., had assigned all rights in the patent at issue to another entity, Cirba IP. The Court held that the re-assignment meant that Cirba Inc. lacked standing such that it should not have been part of the trial, and that including Cirba Inc. in the trial impacted the arguments enough to warrant a new trial. Id. at D.I. 752, 946.

Yesterday, the Court addressed plaintiff's motion for a preliminary injunction pending the new trial. It looks like it was an easy decision for the Court, because plaintiff relied entirely on the previous trial win to show a likelihood of success—despite the fact that the Court had granted a new trial:

Rather than brief why it will likely prove infringement, Cirba summarily states that it "is likely to succeed on the merits of its patent infringement claim because it already has," referring to the vacated verdict from the first trial. . . . This Court, however, granted VMware's motion for a new trial. . . . "[I]t is quite clear, that the order granting the new trial has the effect of vacating the former judgment, and to render it null and void, and the parties are left in the same situation as if no trial had ever taken place in the cause." United States v. Ayres, 76 U.S. 608, 610 (1869). Thus, Cirba has made no "clear showing" that it will likely prove infringement.

It's not hard to see what plaintiff was thinking here. On the surface, the Court ...

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Damages Arcanum

Nathan R. Hoeschen, March 9, 2023
Damages Lost Profits

We try to keep it light here at IP/DE, but sometimes I actually learn something and I feel sort of obliged to pass it on. You know, some real dark arts stuff that I wouldn't have known if I didn't have to read absolutely everything written in the district for this blog.

Why does he have six fingers? Why on only one hand?
AI-Generated, displayed with permission

Today's bit of lore today is about damages, and a split amongst district courts that visiting Judge Bryson has taken a stand on. Can a corporate parent can claim lost profits that would have initially accrued to its subsidiary?

The trite answer to this is "no." The Federal Circuit has squarely held that "a patentee may not claim, as its own damages, the lost profits of a related company." Warsaw Orthopedic, Inc. v. NuVasive, Inc., 778 F.3d 1365, 1375 (Fed. Cir. 2015). However, as Judge Bryson pointed out in his opinion in Kaneka Corp v. Designs For Health, Inc., C.A. No. 21-209 (D. Del. Mar. 3, 2023) (Mem. Op. & Order), several courts have held that lost profits of a subsidiary can still be claimed if they flow "inexorably" from the subsidiary to the parent.

Judge Bryson agreed, stating

To be sure, the Federal Circuit has not expressly recognized that lost profits can be awarded when those profits flow inexorably from a subsidiary to the patentee . . . I find the weight of district court authority on that point to be ...
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Another D. Del. Judge Orders an In-Person Claim Construction Meet-and-Confer, and Cancels Markman (And: Some Thoughts on Claim Construction Meet-and-Confers)

Andrew E. Russell, March 8, 2023
Meet-and-Confer Claim Construction

Andrew E. Russell

Just last week, we wrote about Judge Noreika ordering an in-person meet-and-confer to occur between lead trial counsel regarding claim terms, in the courtroom in Delaware, and "continuing until excused by the Court." In ordering the in-person meet-and-confer, Judge Noreika noted that the parties had "spoke[n] for just 20 minutes about 10 disputed terms" during their meet-and-confer.

Yesterday, Chief Judge Connolly issued an order along similar lines—but outright canceling the Markman hearing. Like Judge Noreika did, the Court noted that the parties had failed to adequately meet-and-confer about a disputed term:

Plaintiffs first made their new proposal [to construe "tangent"] during the "meet and confer" discussion required by paragraph 13 of the Revised Scheduling Order. . . …
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Page Limitless

Nathan R. Hoeschen, March 7, 2023
Page Limits Stipulation

My colleague Andrew wrote a post long ago about all of the things you can stipulate to in D. Del., and all the things you cant. Take a moment to read it—I'll wait.

AI-Generated, displayed with permission

Aaaand we're back. You'll note one of the stipulations listed as "iffy" (legal term) was stipulations to extend page limits. We got a good example of just how iffy those can be last week from Judge Noreika:

IT IS HEREBY ORDERED that the Stipulation is DENIED. The request to extend page limits was filed seven minutes before the over-the-page limit brief was filed. The effect of this was that Plaintiff granted itself an extension without leave of Court and without respect for the Court and its rules. THEREFORE, IT IS FURTHER ORDERED that the Motion for Preliminary Injunction is DENIED for failure to comply with the page limits. Counsel may re-file the motion with a brief that complies with the Court's rules.

Janssen Biotech, Inc. v. Amgen, Inc., C.A. No. 22-1549-MN (D. Del. Mar. 2, 2023) (Oral Order)

Obviously, it didn't help that the parties filed their stip just minutes before the relevant brief, giving the Court no opportunity to act on it. But it led me to wonder just how often these stipulations are denied in ...

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Don't Rely on Pennypack: Judge Williams Easily Strikes Late Contentions

Andrew E. Russell, March 6, 2023
Pennypack Contentions

Is the reign of Pennypack coming to an end?
Is the reign of Pennypack coming to an end? AI-Generated

We talked earlier this year about a decision by Judge Burke that struck a parties' final infringement contentions under a good cause standard, and declined to apply the much looser Pennypack standard.

Today, citing Judge Burke's opinion, Judge Williams likewise declined to rely on Pennypack in striking late-served "Amended Final Invalidity Contentions":

According to the Court's Scheduling Order, Defendants must serve their Final Invalidity Contentions to Chervon by December 17, 2020, which they did so. D.I. 37 if 7(f). On July 27, 2022, Defendants served their Amended Final Invalidity Contentions. D.I. 316 at 1; D.I. 319 at 1. Defendants did not request leave from the Court to amend their Final …
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Court Orders In-Person Claim Construction Meet-and-Confer by Lead Trial Counsel, In the Courtroom in Delaware, Continuing Until Excused

Andrew E. Russell, March 3, 2023
Meet-and-Confer Claim Construction

Unhappy Attorneys
AI-Generated

Judge Noreika is well known at this point for requiring real, substantive meet-and-confers on claim construction. In multiple cases, she has directed parties to further meet-and-confer after finding their initial efforts insufficient.

She issued another such order this week, this time directing the parties to have what appears to be a supervised meet-and-confer, in person in the courtroom:

ORDER . . . The parties did not comply with the Court's February 13, 2023 Oral Order requiring a good-faith meet and confer. Instead, the parties spoke for just 20 minutes about 10 disputed terms, as well as "hearing logistics" and a proposal by MarkForged to request deferral of certain claim constructions until dispositive motions. There is no breakdown indicating …
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