A Blog About Intellectual Property Litigation and the District of Delaware


DED
United States District Court for the District of Delaware

The Reference Trap

Nathan R. Hoeschen, June 3, 2021
Wilfulness 12(b)(6)

Overflowing with delicious facts
Overflowing with delicious facts Natalie Grainger, Unsplash

The seeds of a motion to dismiss are often planted in the complaint. To some extent this is unavoidable—for instance, try asserting software patent claims without raising the specter of a § 101 motion. Sometimes, though, you can avoid a motion to dismiss by just including a little less detail in the complaint—and especially by not referring to troublesome documents.

Peloton Interactive, Inc. v. ICON Health & Fitness, Inc., C.A. No, 20-662-RGA, D.I. 103 (D. Del. May 28, 2021) is a good example (we discussed another aspect of this opinion last week). There, Icon brought counterclaims for patent infringement related to a series of patents that the parties had previously litigated, resulting in a settlement agreement and license. Peloton moved to dismiss those claims, arguing that the referenced license disposed of the infringement claims.

The interesting bit is that the license itself was not attached to Icon's counterclaims, but was only supplied to the Court with Peloton's motion to dismiss. In ruling on the motion, Judge Andrews noted that this would normally convert the 12(b)(6) motion into a summary judgment motion, unless ...

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Judge Hall Blunts Hemp Processing Company's Bid for Preliminary Injunction

David M. Fry, June 2, 2021
Legal Writing Trade Secret Litigation

Plants
Matthew Brodeur, Unsplash

In a trade secret dispute over THC remediation processes, Judge Hall recently denied a hemp processing company's motion for a preliminary injunction. The redacted version of her opinion came out yesterday, and it gives some helpful guidance for parties litigating trade secret disputes. It also touches on an important tip for legal writers everywhere.

As usual, one of the key questions was whether the plaintiff adequately identified the trade secrets at issue. This requires a careful balancing act—the trade secret needs to be broad enough to cover what the defendant is doing, but narrow enough to qualify for trade secret protection in the first place.

In trying to walk this line, lawyers are often tempted to use terms like "and/or" to keep their options open. In this case, the plaintiff used "and/or" in defining the scope of two of its alleged trade secrets. This ended up playing an important role in Judge Hall's likelihood-of-success analysis:

Starting with (1), SCB’s definition is not only general, it uses the modifier “and/or,” which suggests to the Court that SCB is attempting to claim as a trade secret the idea of oxidizing THC into CBN. If so, the Court rejects it. As SCB acknowledged at oral argument, the process of oxidation, and more particularly the fact that THC oxidizes into CBN, was well known in 2019.
. . .
Although SCB’s position is not entirely clear, its use of the “and/or” modifier in its interrogatory response suggests that it might be seeking to claim as trade secrets each of the individual “parameters and conditions” set forth in its interrogatory response and every possible permutation. As Defendants’ expert points out, that's 57 potential combinations of trade secrets. (D.I. 47 ¶¶ 29, 30.) SCB does not provide separate argument as to any particular permutation, making it impossible for the Court to determine which combinations of “parameters and conditions” it intends to press.

As legal writing experts ...

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Overlap of One Patent Not Enough to Continue Stay In Favor of ITC Proceedings

Jeff Castellano, June 1, 2021
ITC Stay

In certain circumstances, a stay pending the resolution of an ITC Section 337 Investigation is automatic. But where the overlap in patents is not total, whether to stay proceedings on the non-overlapping patents is left to the discretion of the district court judge.

ITC
The USITC in Washington DC, Toytoy at the English Wikipedia, CC BY-SA 3.0 , via Wikimedia Commons, CC BY-SA 2.0

Judge Andrews recently exercised that discretion to deny a request to continue a stay for non-overlapping patents where one of twelve patents-in-suit was still pending at the ITC.

Initially, five of the twelve patents had been asserted at the ITC. Of those, three were involved in an appeal to the Federal Circuit, and just one was remanded to the ITC.

The defendant in Wirtgen America, Inc. v. Caterpillar, Inc., C.A. No. 17-770-RGA argued that all five overlapping patents were subject to a mandatory stay under 28 U.S.C. § 1659(a). ...

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Judge Andrews Rejects Heightened Pleading Standard for Lanham Act Claims (But Notes 3d. Cir. Split)

Andrew E. Russell, May 28, 2021
MTD Lanham Act

These are not Pelotons.
These are not Pelotons. Jonathan Petit, Unsplash

In competitor cases, parties sometimes include Lanham Act claims alongside patent claims. That's what happened in Peloton Interactive, Inc. v. Icon Health & Fitness, Inc., C.A. No. 20-662-RGA (D. Del.), where both sides brought patent and Lanham Act claims or counterclaims.

Peloton moved to dismiss defendant Icon's Lanham Act counterclaims, which alleged that Peloton had made various false and misleading statements concerning things like whether the Peloton bike was the "first of its kind" and unique among its market, along with statements about Peloton music offerings.

Peloton argued that Lanham Act claims are subject to a higher pleading standard, relying on an old E.D. Pa. case from long before the Supreme Court's decisions on this issue in Twombly / Iqbal:

Peloton urges the Court to apply an “intermediate” standard that first appeared in Max Daetwyler Corp. v. Input Graphics Inc, 608 F. Supp. 1549, 1556 (E.D. Pa. 1985). The Court held, “[i]n litigation in which one party is charged with making false statements, it is important that the party charged be provided with sufficiently detailed allegations regarding the nature of the alleged falsehoods to allow him to make a proper defense.” . . . ICON argues that the standard articulated in Max Daetwyler is inappropriate because it was decided before Twombly and Iqbal. . . . Additionally, there is disagreement within district courts in the Third Circuit as to its applicability. . . .

Judge Andrews declined to apply the heightened standard, quoting

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A Clarification of an Old Standard

Nathan R. Hoeschen, May 27, 2021
Default Standard

New Tricks?
New Tricks? Go to Charles Deluvio's profile Charles Deluvio, Unsplash

The Delaware Default Standard for Discovery, which has been around in its present form for about a decade now, applies to some extent in every Delaware patent case. Given how frequently discovery issues are litigated in Delaware, I was somewhat surprised to see a new ruling from Judges Connolly and Hall clarifying a bit of the Default Standard that I don't believe has ever come up before.

In addition to describing the initial exchange of contentions and the format for ESI production, the Default Standard also sets a presumptive limit on the time period for discovery:

Absent a showing of good cause, follow-up discovery shall be limited to a term of 6 years before the filing of the complaint, except that discovery related to asserted prior art or the conception and reduction to practice of the inventions claimed in any patent-in-suit shall not be so limited.

Default Standard Section 4(e)

The question that arose this month in LEO Pharma A/S et al v. Glenmark Pharmaceuticals Ltd., C.A No. 20-1359-CFC-JLH, D.I. 60 (D. Del. May 25, 2021), was what is "follow-up discovery"? ...

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Judge Burke Reiterates Difficulty of Obtaining Pre-Institution IPR Stays

David M. Fry, May 26, 2021
Motion to Stay IPR

Although the trend in D. Del. is to grant IPR stays post-institution, the inverse is also true: pre-institution have become much more difficult to obtain.

In an oral order denying a pre-institution stay last Thursday, Judge Burke took the opportunity to reiterate why these motions are generally denied:

[W]ith regard to the simplification factor, the Court (absent some unique circumstance not present here) does not see the wisdom in staying a case that is otherwise proceeding forward (with a schedule already in place), in favor of the occurrence of an event (grant of an IPR petition and subsequent institution of an IPR) that has not happened yet. The Court also notes that although, as a statistical …
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D. Del. Announces Transition to Phase 3 of Reopening Plan, Including Simultaneous Jury Trials

Andrew E. Russell, May 25, 2021
COVID-19 Trial Calendar

Hopefully we can all stop seeing this image soon!
Hopefully we can all stop seeing this image soon! CDC / Alissa Eckert, MS; Dan Higgins, MAMS

Today the Court announced that it is proceeding to Phase 3 of the Court's reopening plan. According to the order, this means:

  • Simultaneous jury trials (!)
  • Reduction to 3 feet of social distancing
  • Masking required in all common areas
  • Masking in the courtroom is up to the individual judges

According to the Court's re-opening plan, this may also include a return to full staffing of the Clerk's Office (I'm not certain that hasn't already happened).

As set forth in the order, Phase 3 will start on June 7, 2021 which I believe is the start of the next scheduled jury trial.

The …

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Judge Burke Finds "Group Pleading" Insufficient

Jeff Castellano, May 25, 2021
MTD Dismissal

It is not uncommon for patent infringement plaintiffs naming multiple defendants to group those defendants in the complaint and make allegations of infringement generally, rather than separately detailing what wrongful acts each defendant is alleged to have done. The group pleading approach is not "impermissible per se," as Judge Burke recognized in a recent R&R, claims based on group pleading are subject to dismissal where they do not include "'enough facts to render it plausible that each defendant has performed at least one type of U.S.-related infringing act' or if it otherwise fails to provide each defendant with sufficient notice of the basis for the claims against it."

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Court Declines to Hold Defendant to Claim Construction Position Taken in Uninstituted IPR Petition Absent Bad Faith

Andrew E. Russell, May 21, 2021
Judicial Estoppel IPR

Yesterday, Chief Judge Stark addressed whether "judicial estoppel" prevents a defendant from taking one position in an uninstituted IPR petition and asserting a contradictory position during claim construction in the district court:

[Plaintiff] Sequoia contends that [defendant] Red Hat is judicially estopped from arguing for a narrower construction than it proposed during the IPR . . . . Judicial estoppel is only appropriate when: (1) the party to be estopped is asserting a position that is irreconcilably inconsistent with one she previously asserted; (2) the party changed her position in bad faith, i.e., with an intent to play fast and loose with the court, and (3) the use of judicial estoppel is tailored to address the affront to the …
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Four+ Page Long Notice of Subsequent Authority Proves Effective

Andrew E. Russell, May 20, 2021
LR 7.1.2 Supplemental Pleading

In Delaware, Local Rule 7.1.2(b) sets deadlines for responding to motions, and states that

Except for the citation of subsequent authorities, no additional papers [other than the opening, answering, and reply briefs] shall be filed absent Court approval.

Based on this rule, parties file "notices of subsequent authorities" to present after-arising citations (and sometimes other content) to the Court.

But some attorneys disagree about just how much argument can accompany the "citation[s]" a notice of subsequent authority. The authority is mixed.

In some cases, the Court has declined to consider notices containing argument that are filed without leave. See, e.g., Forest Labs., Inc. v. Amneal Pharm. LLC, C.A. No. 14-508-LPS, 2015 U.S. Dist. LEXIS 23215, at *51 …

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