A number of years ago I was in chambers with an Eastern District judge and opposing counsel discussing a procedural question in a Fair Labor Standards Act case. I admitted to the judge that I didn't have a Fifth Circuit case on what the court was having to decide, but I did have a district court opinion that I thought made sense on the issue from another Texas court. The judge asked me who it was by, and when I told him, he smiled and said "well that's better than the Fifth Circuit."
It is still not that long since section 285 left the Supreme Court's drydock in Octane Fitness last year with streamlined new language and that flashy new standard of review, and notwithstanding the useful guidance from the recent TQP v. Newegg case from the Federal Circuit, there is still not a lot of binding authority on the subject. Hence it is always useful to consider what other district courts have said interpreting the post–Octane Fitness 285, even though none are more than persuasive.
As readers know, I posted last week on Judge Gilstrap's most recent opinion on the subject, and Friday morning I saw another opinion, this time from U.S. District Judge Lee Yeakel of the Western District of Texas – Austin Division. Many Eastern District practitioners are familiar with Judge Yeakel, as he is a frequent participant at bench/bar conferences, federal judge panels, and patent seminars, so I thought they might like to know what he had to say on the subject.
In Ushijima v. Samsung Electronics, Judge Yeakel was presented with a 285 motion by defendant Samsung, which had prevailed in a jury trial. As readers will recall, this is unlike both Judge Gilstrap's case and the Federal Circuit's TQP case involved situations where the plaintiff voluntarily dismissed the case, not defense wins at trial.
Judge Yeakel agreed with the plaintiff that the case was not "exceptional" for 285 purposes, noting that at the time he ruled in the plaintiff's favor on Samsung's summary judgment motion and motion for judgment as a matter of law, he had concluded that there were triable fact issues surrounding whether the disclaimed products were the functional equivalent to the Samsung products that contained certain cores. "The court found, and continues to find, that Ushijima's position on that front, although not strong, is not baseless. Both parties provided expert testimony on this issue. A court should not be quick to declare a case exceptional, when experts in the scientific field before the court disagree on the conclusion to be drawn from language in a patent or on the scope or breadth of the patent." Accordingly, Judge Yeakel (isn't it funny my dictation software persists in trying to call him Judge "Jekyll"? Maybe it's just me) concluded that neither the strength of the plaintiff's litigation position nor the manner in which the case had been litigated was unreasonable, and accordingly Samsung had not proven by a preponderance of the evidence that the case was exceptional under section 285.
Following the Supreme Court's opinion in Octane Fitness changing the standard for award of attorneys fees under Section 285 in patent cases, 285 motions have become significantly more prevalent, providing a vehicle for judicial review of both the reasonableness of a losing party's claims and its conduct in the litigation - although in practice most cases, at least locally, arise from voluntarily dismissed cases (as in the case of the Federal Circuit's recent SFA v. Newegg). In fact, this week's Texas Lawyer contains an article by John Council profiling Rudy Telscher, who argued the case before the Supreme Court, and reviewing trends regarding such motions.
This morning we got another data point with respect to these motions in the Eastern District under the following facts: (1) plaintiff voluntarily dismisses case against three defendants, and (2) defendants file a 285 motion.
In a brief order resolving both the 285 motion and an objection to an untimely bill of costs, the court noted that while it previously granted plaintiffs opposed motion to dismiss in the case, it had not observed anything exceptional about the party's conduct during the litigation. It declared the defendants the prevailing party, and awarded costs.
The crux of the motion was that the plaintiff allegedly (1) never had a basis for its claims, (2) provided objectively unreasonable infringement allegations, (3) and conducted an inadequate pre-suit investigation. After reviewing the claims, the court declined to find that any of these grounds constituted litigation misconduct – the destruction of certain raw testing data (two pieces of scrap paper which were discarded after the results were recorded) was not shown to be prejudicial, the case was at an early stage when it was voluntarily dismissed, the pre-suit investigation obligations were not shown to not have been met (have to track the burden of proof here), and the plaintiff's claim construction and infringement positions were not shown to be wholly unreasonable. Accordingly "considering the totality of the circumstances" the Court found that the defendants had not demonstrated by a preponderance of the evidence that the case stood out from others with respect to litigation misconduct by the plaintiff so as to be deemed exceptional under Octane Fitness.
The opinion concludes by ruling on the plaintiff's opposition to the defendants' bill of costs. The court rejected the claim that the bill was untimely because it was entered one day after due, which the court found was "excusable neglect." Accordingly the court awarded taxable costs to each of the defendants varying from the low to mid-for figures. The order isn't clear on this point, but it appears that the amounts of the costs were not disputed, just the timeliness of the bill.
In Mobile Telecomm's Technologies, LLC v. LG Elec's Mobilecomm USA, Inc., 2:13cv947 (7/22/15) the defendant moved to disqualify the plaintiffs infringement expert, noting that the expert had been retained by the defendant to serve as it's expert in connection with two ITC proceedings relating to the same products accused in this case.
After setting forth the current Fifth Circuit law on expert disqualification, Judge Payne noted that the real dispute was whether the prior work was relevant to the current case. On that point, the court stated that it was "heavily influenced" by the fact that the parties agreed that the same devices were at issue, and the time frames were nearly overlapping. Accordingly, the court disqualified the expert, and reset the case for trial on the February 2016 docket.
Yesterday, Judge Gilstrap granted defendant Newegg's motion for judgment as a matter of law as to noninfringement in this case (the court stated that it was carrying rulings on the motion as it was directed to validity and damages and would issue orders at a later date).
To provide the necessary background, this case was tried to a Marshall jury in Judge Gilstrap's court in November, 2013. The jury returned a verdict that the asserted claims were not invalid, were directly infringed and that Newegg had induced infringement, and assessed $2.3 million as damages (TQP had asked for $5.1 million, and Newegg did not put on an expert on damages).
The basis of the Court's ruling was its conclusion that there was not a showing of substantial evidence that the claim limitation was infringed. Specifically, there was a lack of substantial evidence showing a direct causal (or temporal) link between something and something else (if you want nouns, read the opinion). Accordingly, the court concluded that the jury's verdict of infringement was not supported by substantial evidence, and vacated the finding of infringement. It briefly addressed three other arguments, declining to adopt Newegg's position on two of them, and declining to reach the third.
Finally, the court briefly commented on the petition for writ of mandamus that Newegg filed on July 6, 2015 asking the Federal Circuit to rule on the pending motion given the delay since they had been filed. The petition also noted that the pending motion had not shown up on Judge Gilstrap's 6 month CJRA pending motions report. While the Court stated that it was aware that more time had passed since the briefing had been complete on the motion than was optimal, it included a footnote reflecting one reason why. The district clerk's investigation into why the JMOL motion was not listed on the report, explained that the case had inadvertently been stayed administratively (a case with a similar number had been ordered stayed). This put a "stay flag" on the case, which the clerk explained prevented any pending motions in the case from showing on Judge Gilstrap's pending CJRA motions report. "
Interestingly (if you're having a slow day) when Texas Lawyer published its annual "Slowpoke Report" in January 2015 based on the lists of pending cases and motions for Texas federal judges - always a front pager with charts (shown at left) for each district's judges - it reported based on the AO's report that Judge Gilstrap had no motions on his six-month list at all. I have not checked with John Council to see if anyone connected with the parties in this case contacted him to tell him the report missed a case for some reason, but Judge Gilstrap's opinion notes that he was not contacted regarding the pendency of the motion with the exception of Newegg's renewed motion for hearing on the JMOL, which was filed in November 2014, two months prior to the article. The opinion suggests that it would have been preferable to "pick up a phone and call the court's staff" about a long-pending motion before filing a mandamus petition, and suggests that parties "would be better served (and costs reduced) if they elected not to shoot first and ask questions later."
Revising the 2013 trial outcome statistics
As I mentioned the other day, in an April 28, 2014 article in Texas Lawyer Who're Your Calling Plaintiff Friendly Jeff Saltman of Fisch Sigler LLP and I analyzed the 2013 patent verdicts in the Eastern District of Texas and found that Eastern District juries rendered verdicts in favor of accused infringers in 10 out of 14 cases, and split evenly at one for each side in the two invalidity – only trials. For Marshall cases, there were 10 infringement trials and one invalidity-only trial. Defendants won eight of the infringement trials - Plaintiffs won TQP and OPTi v. Avi) and the single invalidity verdict (Alexsam), for a defense win rate of 73%.
A Marshall jury rendered a verdict yesterday in Magistrate Judge Roy Payne's court in DataQuill Limited v. ZTE USA, Inc., 2:13cv633. The jury found the plaintiff had shown that all of the five asserted claims were infringed, and that none of the asserted claims were shown by clear and convincing evidence to be invalid. It set damages through March 2015 at $31,500,000. For comparison purposes, Plaintiff was seking $46.9 million, and defendant argued that even if the patent was valid and infringed, damages were between $1.92 and $2.35 million.
Just did my first Periscope video post #edtexweblog - Recent Case Transfers about recent activity sending cases to visiting judges. Didn't see any of you live during it, but it's available on my Twitter feed here, it appears -
I'll say this - it takes way less time than writing a post! Steve Dotto has an interesting post on how Periscope works, and it got me intrigued.
I wanted to recognize that Texas Gov. Greg Abbott recently signed SB 534 into law. The bill, sponsored by Sen. Kirk Watson and Rep. John Smithee, and supported by numerous bar organizations, including Tex-ABOTA, TADC, TTLA and the State Bar of Texas adds to the oath that is required of each person admitted to practice law in Texas, specifically that the person will “conduct oneself with integrity and civility in dealing and communicating with the court and all parties.”
The legislation is part of a national push to include similar language in lawyer oaths, and follows 13 other states, which have enacted similar legislation, reflecting a recognition of the important role that civility plays is allowing our justice system to function effectively and efficiently.
No, existing lawyers are not grandfathered. As Texas lawyers know, the Texas Lawyers Creed enacted in 1989 already covered this ground, and in my experience civility is the norm in the courts I have practiced in, and rare (okay one) has been the judge that tolerates anything less. But this legislation places appropriate emphasis on the subject. Congratulations to all for all the work that went into getting the legislation passed.
I am working with a planning committee for an upcoming civil litigation seminar and we are interested in the topic of using what's referred to as "Big Data" in litigation.
Now this sort of data analysis in general is nothing new - I studied statistics in graduate school to understand when it could be a useful tool to predict the utility of a certain proposed or existing public policy initiative - and just as important to know when a purported "statistical analysis" was pure horsesh%t, and should be called out as such (which is way more fun, by the way).
What we are interested in is educating our attendees on the use of so-called "big data" in litigation. I know that some of the general counsels that I work with mine data to determine whether a matter should be handled in-house or outsourced, and some of the law firms mine data to value their cases and predict how a judge might rule on various motions. Some law schools are even offering “Attorney Analytics” as a class in law schools.
Can anyone recommend a speaker who could discuss this topic in broad terms. Yes, I know there are people that do it specific to IP litigation, and can tell you with a straight face the effect that Judge Davis' morning cup of coffee had on motions for sanctions (grant rate drops by 38.5 percent, with a croos tab for effect of weather and day of the week), but I'm looking for something broader.
Any suggestions? Email me at email@example.com
As recipient of the Certificate of Excellence awards today for his sixth grade class in both language arts and science, Parker Smith would like to let readers know that U.S. District Judge Rodney Gilstrap in Marshall has entered a new standing order requiring parties to notify him within three (3) days when there are determinations in related proceedings (like, oh, IPR, CBM or PGR proceedings) that are materially relevant to pending motions in his court (like, oh, motions to stay). Candidly, he doesn't know why parties wouldn't do this anyway, but he says now you will have to.
Parker would also like to tell you that Minecraft is has favorite online game, he really likes Star Trek and Battleship (the movie and the game), and that he wanted to like the game Swords of Icarus, but regrettably it is way too laggy.
I've heard of being chained to your desk, but this is ridiculous. Yes, I have joined the ranks of those using not just standup desks, but a treadmill under my desk. As I dictate this, walking, I have a two-thirds of a mile at .6 miles an hour in the past hour. I can step off to the left and work standing at my standup writing desk if I need a slant – top surface, or I can step off to the right and sit in my office chair and still use my desk. (Amazingly, if I leave the treadmill running while standing or sitting I continue to accrue mileage without even having to walk. Now what kind of a great exercise plan is that?)
As I have posted previously, articles such as this indicate that standup desks help focus and provide some health benefits, but do not go as far as weight loss. However, pairing a treadmill with a standup desk generally does result in weight loss, while in some cases being reported as enhancing concentration and focus even more. For me, the tipping point was when California lawyer Rachael "Reverse Bifurcation" Lamkin recently flagged an article pointing out that merely standing doesn't provide much in the way of health benefits compared to actually moving. Biased as I am against motion in general, I decided that was probably a good indication that I needed to take the next step (drops mike).
As far as additional fatigue, it does add some. I'm used to standing virtually all day in my office, and with only an hour or so on the treadmill this afternoon, I can already tell that some muscles are being worked and fatigue generated (feet & hips thus far) that wasn't the case when I was simply standing. I assume it is going to get much more pronounced tomorrow and in the future.
At least in my experience, the idea is that if pacing or walking helps you to think, it lets you do that without distracting yourself from the work at hand. Some of us do prefer to pace when dictating. My paralegal recently noticed my habit of walking in circles around my desk when dictating into a wireless headless (don't tell anybody, okay?). It helps me keep a train of thought going - I noticed that right away after I started using wireless headsets for dictation.
I do agree with the Winstead partner interviewed above who indicated that he prefers not to walk when making detailed document revisions – there are some things that benefit from giving a document your complete attention – but paradoxically walking helps me to focus on things on a computer screen. It might have something to do with the fact that you are essentially locked in place with respect to your screens, and for some reason especially when considering several inputs at once, the ability to pace in place helps me turn from one to another more efficiently.
And I think I figured out why – I have so many work surfaces and screens, from sitting desk, standing desk, standing writing desk to monitors 1, 2, and 3 plus the iPad, that it appears I had a tendency to putter from surface to surface sometimes, rather than work continuously. With the treadmill, you do have to organize your work a little more efficiently so that everything is within arm's length. But once you do that, you really can't get away from what is in front of you on the screen without consciously deciding to do so. You can't turn and check what's on the other desk, or pace or anything else. You just have to keep walking and work the next item on the screen. So for certain types of work it does make you more efficient. For me, I notice more focus on the accuracy of operation of the dictation software, and I can definitely see more focus on the content of the specific document or email or website that is in front of me. Not wanting to go to the trouble of getting off the treadmill keeps you focused on the task at hand better than simply standing.
But I'm still not clipping on the safety key.
Many eyes will be turned to David Letterman tonight as he has his last show, ending a long, long run. I was just thinking this morning how much we'll miss his "Stupid Pet Tricks" segment, and in homage (see here at 2:00 for the best explanation of what the word means in this context) to Dave, offer this example from the homo sapiens end of the animal kingdom to accompany yesterday's.
One upon a time (okay, in 2:14cv852 if you must know), a defendant filed a "supplemental brief" in support of a motion to transfer venue which (1) wasn't permitted (it was ten days after the motion and prior to the response) (2) claimed that the only connection between the case at the court was that one of the plaintiff's attorneys clerked for the judge hearing the case (I am not making this up - it actually says that); and (3) misspelled the name of the judge in the same sentence it made the claim. The court transferred the case, with some pointed comments on items 1 and 2. (None on 3).
You can't make this stuff up.
We'll miss you, Dave.
This is a product liability case arising out of an auto accident in North Carolina involving an allegedly defective highway guardrail. Defendant Trinity sought transfer to the Northern District of Texas, which was its headquarters. Judge Gilstrap found that North Carolina was the clearly more convenient venue, more so than either the Eastern or the Northern District of Texas.
It is what happened next that is interesting.
In an addendum to the opinion, the court noted that on May 15, while it had decided and was drafting this opinion and order, it received electronic notice that the defendants had filed an application for a writ of mandamus with the Fifth Circuit seeking to compel the court to grant the motion, as well as a ruling on an emergency motion to stay all proceedings and deadlines and request for expedited briefing that was filed less than seven business days before.
While noting that the application correctly stated that the motion to transfer had been fully briefed and ripe for two months, the court noted that Trinity failed to consider that it had other pending cases and motions besides their own:
As readers know, Friday was former chief judge Leonard Davis' last day on the Eastern District of Texas bench. One of Judge Davis' last opinions reinforced the trend in his final weeks of orders on pending sanctions motions.
At issue in this case was the highly publicized posttrial proceedings following a verdict in favor of plaintiff LBDS Holding Company LLC against the defendants. Following a six day jury trial, the Tyler jury returned a verdict that the defendant had breached the relevant agreement and misappropriated the plaintiff's trade secrets, and awarded $24,414,068 in lost profits and $760,693 in unjust enrichment damages.
Three weeks before the hearing on the posttrial motions, the defendant filed a motion for sanctions, alleging that the plaintiff's case had been based on fraudulently forged documents and a fake domain name "in an effort to inflate the apparent value of LBDS' technology." Within an hour of the filing of the motion for sanctions, plaintiff's trial counsel filed in unopposed motion to withdraw. In addition, the Court noted that the United States Attorney for the Western District of Missouri had filed a criminal complaint charging the plaintiff's CEO with conspiracy to commit wire fraud. It rescheduled the posttrial motions hearing, ordered additional briefing from the parties, and gave the plaintiff additional time to obtain new counsel and respond to the motion for sanctions, after which it held a hearing. This order follows that hearing.
Judge Davis began by noting that the plaintiff admitted the fraud that it perpetrated on the defendant, the court and the jury, but asked the court to vacate only the damages portion of the verdict, since the liability verdict was supported by legitimate evidence. While agreeing that the plaintiff's dishonest conduct related "most directly" to its damages claims, the Court declined to allow the plaintiff to retain the benefit of a liability verdict from a trial that was based on "manufactured evidence and perjured testimony." Accordingly, the verdict was vacated in its entirety.
The Court then proceeded to dismiss the plaintiffs complaint with prejudice as an appropriate sanction in this case, noting that but for the plaintiff's fraud in "dishonestly exaggerating" the value of the project, defendant may never have even entered into the agreement at issue (the real one, not the forged one). The Court then went on to catalog the damage to the defendant, the defendant's counsel, the plaintiff's counsel, the court and the jury.
"Our system of justice is predicated upon truth," the Court concluded. " When self-interest gives way to lies, our whole system of justice breaks down and the rule of law suffers. LBDS’s conduct in this case is without question the worst this Court has ever seen. To serve the best interests of justice and deter such conduct in the future, the least severe sanction this court can impose is to dismiss LBDS’s complaint with prejudice and to award ISOL its attorneys’ fees." (Emphasis added).
Accordingly, the court awarded the defendant $738,706.47, which was the defendant's law firm's fees and expenses incurred since its retention four months prior to the trial date.
Glad to be in Tyler today for Judge Leonard Davis' (outstanding) portrait viewing with many other lawyers who have appeared before him through the years. His staff gave him a custom gun case with their signatures on the (very cool) as well as a book memorializing his time on the bench (even cooler).
Working from the Tyler office today meeting and conferring and reviewing, but I wanted to note that while we're on the subject of patent demand letters this week, Senator John Cornyn of Texas with several of his colleagues has introduced the PATENT Act, which addresses a number of area pertaining to patent litigation, including demand letters. The bill text can be found here. According to the bill summary, the legislatioon does the following:
Patently-O has an analysis of the legislation here.
The reason that I point the legislation out in the context of demand letters is that the legislation's section addressed to demand letters is not dissimilar in scope or intent from the provisions contained in Texas Sen. Nichols' bill which was approved last week by the Texas Senate, and which defined "bad faith" to include objective statements as the prohibited deceptive trade practices, as opposed to a more subjective test contained in other legislation.
Judge Gilstrap denied Apple's motion to sever and transfer this case to the Northern District of California. In so doing, the Court noted the interplay between this motion and prior motions filed by codefendants, including the portions of this motion relating to severance.
The court addressed the traditional factors applicable to motions to transfer, as well as Apple's additional arguments that the claims at issue in this suit arose out of or related to an agreement between Apple and the plaintiff and thus were subject to a forum selection clause, and its claim that language under a nondisclosure agreement required exclusive venue in California.
Plaintiff filed a motion to correct inventorship following a jury verdict of invalidity and noninfringement and remand of the case from the Federal Circuit. In his JMOL ruling in the case Judge Gilstrap granted JMOL as to two of the jury's three bases for invalidity, but denied it as to improper inventorship and declined to make an indicative ruling on the motion to correct inventorship while the appeal was pending.
The Federal Circuit subsequently deferred to the trial court the decision whether to correct inventorship, and the Court granted the motion, thus vacating the judgment of invalidity (but not of noninfringement).
Texas Lawyer's Angela Morris has an article out today on the Texas Senate's recent action passing a bill that would authorize the Texas Attorney General to sue entities that send letters in bad faith to end users alleging that people infringe on their patents. I had an opportunity recently to analyze both the Nichols bill that passed the Senate and another bill introduced in the House for Tex-ABOTA, so the issue is one that I am interested to see the progress on.
SB 1457 adds a section to the Texas Deceptive Trade Practices Act prohibiting someone from sending end users demand letters in bad faith, which it defines as a communication that falsely states that the sender had filed a lawsuit, made a claim that was objectively baseless because the sender didn't have a right to license or enforce the patent, or because the patent was invalid, unenforceable or expired. Additionally, any letter must list the patent holder's identity, the patent, and the way that the end user had allegedly infringe the patent. If the AG chooses to sue a violator, it could seek injunctive relief, civil penalties, reimbursement to the state for investigation and prosecution costs, and restitution to victims for legal and professional expenses.
On behalf of my course codirectors Justice Jane Bland of Houston and Lamont Jefferson of San Antonio (who are not responsible for any attempts at humor infra), I would like to invite you to attend the State Bar’s 38th Annual Advanced Civil Trial Course this summer and fall. The program features timely presentations by the state's best speakers and presenters, on issues ranging from jury persuasion to new and proposed federal and state rules of civil procedure.
The course faculty includes local judges and experts at each course site, who will present topics that are especially relevant to local practitioners. Some of the highlights of the course include:
(Apparently my Federal Update didn't make the highlights. What's the point of being a course co-director when they won't plug my topic? Geez!) Anyway, with three live sites, you have plenty of opportunities to attend.
If you are looking for a relaxing venue for your CLE, come to our San Antonio course July 15-17 at the beautiful and family-friendly Hyatt Hill Country Resort and Spa. Your family will love the activities and water features of the resort as well as its close proximity to Sea World. Call the Hyatt at 210-647-1234 and ask for the State Bar of Texas room block rate of $210 single/double, and tell them how thrilled you are about the Federal Update topic. In all seriousness, this is our most popular site since it is great for kids, so make your reservations soon. My boys' favorite is the "lazy river" (which is a term of art in Texas) and the night time S'Mores at the camp fire. Register for the San Antonio site.
For those in the Dallas area, which is the session I am handling, you might prefer attending the August 19-21 venue at the Westin Galleria Dallas. The Galleria offers enough premier shopping to choke the proverbial horse in the heart of the North Dallas business corridor. The Westin Hotel provides a contemporary, stylish atmosphere and comfortable accommodations with state-of-the-art workout facilities. Spend your days learning and your evenings enjoying the variety of activities the area has to offer. (Seriously - my family and I are in the area a lot - call me for restaurants and activities for your particular herd - we have some favorites). Call the Westin directly at (972) 934-9494 and ask for the State Bar of Texas room block of $175 single/double. Register now for the Dallas site.
If you yearn for the heat and humidity of a Texas summer in the fall, and like having two hotels with the same name in the same mall, we offer the last of our three in late October: the October 28-30 venue at the Houston Westin Oaks in the Galleria Mall. The hotel offers comfortable rooms, workout facilities, swimming pool, and several dining options. Enjoy the top-notch CLE in the beautiful ballroom and spend your evenings shopping and dining with friends. To make your reservation at the Houston Westin Oaks, call 713- 960-8100 and ask for the State Bar rate of $170 single/double. Register for the Houston site.
All three live courses come with early-bird discounts, as well as a discount for all 7,000 of my buddies in the State Bar Litigation Section (you can thank me later).
If you have any questions or would like to register by phone, please call 800-204-2222, ext. 1574.
On the other hand, if you're like my boys (pictured at left when back they were cute) you prefer watching people on video as opposed to live (not to mention as opposed to having a life). Well, we've got that covered too. Register for the Video Replay in Austin on November 18-20, 2015 at the Thompson Conference Center. Register by November 4th and save $50 - again Litigation Section members can save $75.
And yet - there's more. Register for these programs and you can access the streaming videos of the speeches for up to a year and the digital course materials for several years. You'll find them at TexasBarCLE.com within 6-8 weeks after the live program, under My Online Benefits. (You'll need to log in as a registered user of the site to access this feature.)
Please come and join us for this outstanding program.
For those that have not seen it yet, here is a link to KLTV-Tyler's ten-minute special report Wednesday night on the patent docket in East Texas. The text of the story is online, but a link to the video is included as well.
Reporter Taylor Hemness' feature is not your typical 90 second "gee there are lawyers in suits all over the square - wonder why?" story, and includes a lengthy interview with U.S. District Judge Leonard Davis about the docket.
Just read that a trademark examiner denied Katy Perry's request to trademark "Left Shark" from this year's Super Bowl halftime.
Whether you consider this a major failure of our nation's intellectual property system or of our collective ability to ascertain what's important is up to you. But I did think the examiner went a bit overboard citing "Free Willy" as precedent.
Last fall I posted on Judge Mitchell's order denying Newegg's request for attorneys fees following the plaintiff's voluntary dismissal of its case. Newegg sought reconsideration before Judge Schneider, who declined to overturn her findings and instead adopted her opinion is the opinion of the Court.
One of the interesting things about a docket that includes repeated assertions of the same patent claims where the case law continues to evolve is that you can sometimes see the same judges applying changed legal standards to the same claim language and see the real – world effects of changes in standards.
I was reminded of that this morning when reading a recent order with the court's claim construction rulings and rulings on the defendant's indefiniteness arguments. In that case, the parties agreed on three terms, submitted 10 terms to the court is disputed, and the defendant asserted that five more terms were impermissibly indefinite under the new Nautilus standard.
The court concluded that three of the five were not indefinite, and a fourth would be given its ordinary meaning, but that the fifth was impermissibly indefinite. Interestingly, the same judge had ruled the same term not to be indefinite under the prior standard just a few years ago, but concluded that under the new standard it now was. The net effect was that three claims from two of the 11 patents in suit were invalidated as indefinite.
If you haven't voted already in the State Bar president – elect race, or for your local bar director or TYLA director, if there is a race in your district this year, remember to do so before the end of the Month. Both candidates are well-qualified and would do a good job, but don't let that stop you from voting - figure out which you think would do a better one, and vote.
In addition to information on the ongoing election, this month's bar journal has an article I wanted to call to readers' attention. Technology: Start Up - Going solo without breaking the bank by Nerino J. Petro Jr. and Bryan M. Sims is a helpful summary of office technology for new solos with suggestions at different levels of spend. I speak on the subject of technology for the small law firm fairly frequently, and am glad to see the TBJ provide some input on this subject as well.
Well that didn't take long. Newly minted Eastern District Judge Robert W. Schroeder III (shown at left during his investiture last month) brought his first patent trial to a close last week when a Tyler jury in his court found for the patent holder.
At 3:53pm Friday afternoon (just before 4pm is the sweet spot for a lot of Tyler juries - don't know why, but it just is) the jury found both claims literally infringed, and willfully infringed. No invalidity issues were submitted, and the jury awarded $1,541,333.
One of my favorite bar activities these days is working on planning committees for seminars for lawyers. I think I get recruited because I come up with the weirdest ideas for how to do something differently – at least I certainly did yesterday when I participated in one for the upcoming 39th Annual Page Keeton Civil Litigation Conference put on by UT Law CLE in Austin. (Last year's agenda is here). Last year I was unable to attend the conference since it was set at the same time as the Eastern District's bench/bar but I made the best of it by stealing one of its speakers for the bench/bar. (Well, not exactly stole – but we did have one of the speakers from the Austin event fly up the next day to present a similar topic for us after I reported back that this seminar had some great topics on legal writing and writing for reading on computer screens that I thought attendees might be interested in).
This year's event is scheduled for October 29 – 30, 2015 at the Four Seasons Hotel in Austin, and I highly recommend it for practitioners interested in useful updates on a variety of topics dealing with civil litigation. The agenda is not finalized yet obviously (we just met yesterday) but I can already tell they're going to be some very interesting topics and speakers. Not that you need an excuse to visit Austin in the fall, of course, but your accountant might feel differently.
Not sure yet if I will be presenting on a topic – I volunteered for one pressure (peer pressure, okay?), and then argued persuasively (at least for a few minutes) that that topic was not important enough to be included, but the committee later put it back on the tentative agenda as an alternative. So not sure whether you'll be hearing from me or not, but as the topic is a subset of one I will be doing for a different seminar this summer, there will be a paper one way or the other.
Had a great time presenting "Technology and Productivity for the Practicing Attorney " for the Smith County Bar Association in Tyler last Friday. Covered the paperless office, equipment and useful apps for a law office, law office disaster plans, and personal productivity tips.
And just to reiterate, the one really killer app that I forgot to update the presentation with is Scannable, the new scanning program for smart phones by Evernote. You could see the lawyers who deal with documents in the real property records get excited when I told them they didn't need to make photocopies of pages they were interested in anymore.
It's a quiet Good Friday at the office catching up on reading (both legal and nonlegal) and looking over some old Easter photos while the boys are sleeping late at home before we head out for an abbreviated spring break.
I particularly like this one where I'm already expressing an interest in plaid sportcoats, my grandfather is looking appropriately dignified amid the chaos that was fashion in 1970, and what the hell is that on my mother's head?
Jillian Centanni has a good article 11 Lessons From A Year Of Post-Octane Atty Fee Decisions on Law360, in which she provides some useful guidance from the recent district court cases concerning whether a case is "exceptional" under section 285 for purposes of recovery of attorney's fees. To summarize, Vince Lombardi once said that “winning is not everything, it is the only thing” but he can't have been talking about section 285, because the courts are holding that winning is, well not much at all, actually. It takes something more, and the article provides a useful checklist of what that something might or might not be. It is a shame that she didn't cite any of the opinions by Federal Circuit judges Bryson and Dyk sitting by designation in the Eastern District of Texas on this point, since they might provide some useful guidance into how the new standard might be perceived on appeal since that is, you know, their day job. They are not inconsistent with the cases that she did cite, but in my experience, you are wasting a good opportunity to mooch off someone else's very good work if you don't check for cases by Judge Bryson first...
And as I have posted recently, I have been speaking on the topic of productivity, the paperless office and office technology a lot lately, and am getting ready for yet another presentation on the topics to the Smith County Bar Association in Tyler next Friday. In the process of updating my presentation, I ran across a good article by Professor Naomi Baron on a topic I like to cover, which is the difference between handling reading on paper and on a computer screen. In Why Reading On A Screen Is Bad For Critical Thinking, Professor Baron points out some issues that I have seen come up repeatedly in discussing how we read and process information. Specifically, studies are consistently showing that people concentrate better when reading on paper, and remember what they have read better. Unfortunately, studies also show that we significantly overestimate what we remember and learned when it was on a computer screen. I cite and discuss some of those studies in my paper on the subject, and will talk about that in Tyler next week.
Speaking of personal productivity, I am always glad to see a good article explaining the Getting Things Done (GTD) system by David Allen, and ran across a new good summary of it a couple of weeks back, GTD 101: The Beginner’s Guide To Getting Things Done by Michael Schmitz (who almost has a really good name) on the www.asianefficiency.com website. If you aren't familiar with the system, and don't want to take the time to read the book to find out what it is about – in the article does note that the book is a little lengthy and repetitive - it is one of the best summaries I have seen, and should help you decide if the system is for you.
Finally, Matt Mcfarland (who apparently has some issues with capitalization - the "f" is not a typo) and has an interesting article in the Washington Post Why shades of Asperger’s Syndrome are the secret to building a great tech company, that points up the potential benefits of not having the conventional attachment to social norms that is a characteristic of some forms of autism, including Asperger's. No particular reason I'm interested in this.
Let's see - what else? A few venue orders, a raft of Twiqbal orders (one of which I posted on yesterday), a long list of miscellaneous commercial and criminal cases from Sherman and Plano, and last but not least, an interesting order on a Daubert motion excluding a plaintiff's damages expert for running afoul of the entire market value rule (more or less) on a damages expert in a patent case, and also suggesting that some revisions in light of a marking issue might be in order. As my college roommate used to say, "Good stuff, Maynard."
Well, that's enough work for a day we're closed - off to Gucci's for a light (ha!) lunch, then time to hit the road. Hope everyone has a good holiday weekend. Happy Easter, and may all the eggs you find be golden.
Content Guard Holdings, Inc. v. Amazon.com, Inc., 2:13-CV-1112-JRG (E.D. Tex. 3/30/15) (Gilstrap, J.)
Judge: William C. Bryson
Holding: Motion for Exceptional Case Status & Attorney's Fees Denied
This case represents another data point under 35 U.S.C. § 285, in which a prevailing party sought an award of attorneys fees and costs. After reviewing the current state of the law following the U.S. Supreme Court's decision in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014), Judge Bryson denied the request, finding that the defendant's claims that the case was exceptional because the plaintiff had allegedly (1) asserted a clearly invalid patent, (2) litigated an infringement position that the court expressly forbade; (3) asserted a baseless damages theory; and (4) engaged in bad faith litigation (which the Court found was a repackaging of the three prior grounds) did not support such a finding.
A famous historian once observed of the southern part of the United States that in it the past is not forgotten - in fact it really isn't even past.
Ready to be stickered as an aditional exhibit in support of that proposition is the 20th Annual Sam B. Hall Jr. Lecture and Banquet, which will be held at 6:30 p.m. this evening in the Phillips Great Room on the ground floor of the Bennett Student Commons at East Texas Baptist University in Marshall.
The lecture series program commemorates the late congressman and Eastern District of Texas judge Sam B. Hall, Jr., who was a Marshall native and an alumnus of the College of Marshall, which is now ETBU. (He also took in strays as law clerks from time to time, including yours truly, hence his location in my office peering down at me when I'm at my desk. I get in trouble if I'm not watched, so he and Pam are keeping a careful eye out).
Phillip B. Meyer, Houston businessman and ETBU trustee, will speak on his life experiences and growth in faith as a business leader. Currently a partner and vice-president with Oilfield Precision Products, Inc., of Houston, Meyer is the former president of Core International, LLC, and has more than twenty-five years of experience in various facets of the petrochemical industry, including finance, sales, engineering, operations, customer service, and capital equipment sourcing.
The program will also include the announcement of the sixth annual Sam B. Hall Jr. Civic Service Award recipient.
Whatever is Right: Sam B. Hall, Jr., the biography of Judge Hall, will be offered for sale, with proceeds going to benefit the endowment in Judge Hall's name.
Interesting article about the local patent docket by reporter Dylan Baddour in Thursday's Houston Chronicle. The article focused on some of the recent litigation involcing Apple, and has commentary by Prof. Paul Janicke and me on the whys and wherefores of the docket.
In today's news, my oldest Grayson took this picture of a chicken crossing the road on his way to school in Shreveport (he did not think to ask it why), and we learned that last night a Tyler jury in Judge Rodney Gilstrap's court found for defendant Apple in Core Wireless v. Apple. The jury found none of the five wireless patents infringed after deliberating for about five hours. The plaintiff sought $100 million while Apple pegged the damages if infringement was found at $1 million.
I am avoiding the temptation to point out that the plaintiff laid an egg. (Unsuccessfully, obviously).
Just a reminder of the upcoming USC Gould School of Law 2015 Intellectual Property Institute next Tuesday, March 24, 2015 - 7:15 a.m. to 5:35 p.m. at the JW Marriott Los Angeles at L.A. Live, in Los Angeles, CA
Speakers on cutting edge patent, copyright and trademark issues will include:
Additional highlights include:
Judge: Ron Clark
Holding: Order Approving Proposed Settlement Agreement Affirmed
Following more than three years of bankruptcy proceedings, the bankruptcy court approved a proposed settlement agreement between the bankruptcy trustee on behalf of the bankruptcy estate with two claimants against the estate. Another claimant appealed the order to district court, asserting that the bankruptcy court erred in approving the trustee's proposed settlement when the trustee offered no evidence in support of the settlement at the hearing (there was alleged to be evidence in the record from previous proceedings, and to be fair - they did hand up a notebook) and in approving the settlement under the applicable factors.
Judge Clark began by noting that the bankruptcy court's findings of fact were reviewed under the clearly erroneous standard and its conclusions of law de novo, with its decision to approve the settlement reviewed under an abuse of discretion standard.
After reviewing the underlying facts, the Court concluded that the bankruptcy court did not abuse its discretion in approving the settlement despite the fact that evidence was not offered at the hearing, noting that the case already had more than 1,200 entries on its docket sheet, and the bankruptcy court had already held a lengthy trial on contested claims in the case. At the hearing on the settlement agreement, the trustee requested that the Court take notice of the record, and no party objected to the Court relying on that prior evidence presented to it as the basis for its determination of the settlement agreement – in fact counsel for the objecting claimant was the only counsel to appear by phone rather than in person, and did not offer any evidence or witnesses in opposition to the settlement agreement.
With respect to whether the bankruptcy court abused its discretion in approving the settlement under the relevant factors, the Court concluded that after reviewing the lengthy record, considering the bankruptcy court's wealth of experience with the parties to the appeal and to the settlement agreement, the Court could not say that the bankruptcy court abused its discretion in approving the settlement agreement under the applicable factors.
Last Friday a jury in U.S. District Judge Richard Schell's court in Plano (back when he was an active judge) rendered a verdict in favor of the plaintiff in a complex intellectual property case, Texas Advanced Optoelectronic Solutions v. Intersil.
Breach of Contract
After being instructed as a matter of law that the defendant retained confidential information in breach of a confidentiality agreement, the jury found one dollar in nominal damages attributable to the retention of that information, and that the defendant had failed to comply with the confidentiality agreement. It assessed damages at $12 million as a reasonable royalty arising from this failure to comply.
Trade Secret Misappropriation
The jury then found that the plaintiff had proven that the defendant misappropriated its trade secrets, and assessed $48,783,007 in damages, choosing to place the damages under disgorgement as opposed to reasonable royalty. It further found that the misappropriation resulted from fraud, malice or gross negligence, and assessed an additional $10 million as exemplary damages for that trade secret misappropriation.
(For those of you keep track, we're up to $70,783,007 in damages, and we're not even to the patent claims yet. You might want to resharpen your pencils now. This was a long verdict form).
The jury was then asked whether the defendant had proven that the plaintiff must have known or must have reasonably been able to discover that the defendant had use the plaintiff’s proprietary information to compete products before November 25, 2005, and answered no. It did find, however, that the plaintiff had proven that the defendant fraudulently concealed the facts upon which the plaintiff’s misappropriation of trade secrets claim was based.
The jury found that the defendant intentionally interfered with the plaintiff’s prospective business relations with Apple, and assessed as damages $8 million as the amount that would reasonably and fairly compensate the plaintiff for its lost profit damages arising from the defendant's intentional interference with its prospective relations with Apple.
The jury also found that the plaintiff proved by clear and convincing evidence that the defendant's tortious interference was, again, the result of fraud, malice or gross negligence, and assessed another $10 million in exemplary damages for that tortious interference.
The jury found that all four of the accused products infringed all six asserted claims of the patent in suit, and that the defendant had not proven by clear and convincing evidence that any of the claims were invalid due to obviousness, for failure to satisfy the written description requirement, or for failing to contain a sufficiently full and clear description of how to make and use the full scope of the claimed invention. (In an charming note, the jury not only checked the box for “no”, but added a handwritten “No” for each of the 18 boxes where it was asked and invalidity question).
As far as damages, the jury assessed $73,653.51 in patent infringement damages, and found that the infringement of the patent was willful
($88,783,007 + $73,653.51 = uh, $88 million and some change)
The jury found that the defendant had not proved that its conduct was excused because of laches or unclean hands.
Calypso Wireless, Inc. v. T-Mobile USA Inc., E.D.Tex., March 05, 2015 (NO. 2:08-CV-441-JRG-RSP)
Judge: Roy Payne
Holding: Motion for Sanctions Denied
Last March, Judge Payne denied the defendant's motion for sanctions under 35 USC section 285. Following the Supreme Court's issuance of two new cases, familiar to readers, the Court sua sponte issued this amended order supplementing the prior opinion to reflect the change in the standard of proof and legal standards.
At issue in this motion was the defendants claim that the plaintiffs conduct in the case was exceptional because (1) the plaintiffs conduct allegedly amounted to litigation misconduct, and (2) it pursued a theory of infringement based on a construction of a term that it contended meant that the case was either objectively baseless, or brought in subjective bad faith.
With respect to the claim of litigation misconduct, the defendant identified several facts that it contended supported its claim that the plaintiff pursued the case in a vexatious manner. The Court concluded that the defendant had not demonstrated by a preponderance of the evidence that the case "stands out from others" with respect to the substantive strength of the plaintiffs litigating position or the manner in which the case was litigated, and accordingly was not exceptional on this ground.
With respect to what it characterized as the defendant's primary theory – that the plaintiff knew or should have known that it was pursuing an objectively baseless claim construction theory and thereby an objectively baseless theory of infringement - the Court concluded that while the plaintiff's theory of construction ultimately proved incorrect, considering the totality of the circumstances, it found that the claim construction position was "simply not one that would make this case stand out from others" on this ground either. "The Court ultimately concluded that T-Mobile had the better argument in its Markman ruling," Judge Payne wrote, "but the Court only did so after 15 pages of analysis." It went on to observe the following:
It is the Court's experience that parties in patent litigation suits almost always have conflicting (often substantially conflicting) interpretations of patent claims–and theories of infringement, non-infringement, and validity based upon their interpretation of the patent claims. Accordingly, the Court does not consider a case “exceptional” simply because there is dispute over the construction of patent claims and that a defendant or plaintiff's construction proved to be incorrect–there must be more.
Judges: Wallach, Taranto, Chen
Holding: Grant of Motion for Summary Judgment of Invalidity Reversed
I don't usually post on Federal Circuit cases, but this one I thought deserved a quick shout - and after a sharp-eyed reader pointed out that I was referring to a different grant of a SJ of indefiniteness to AU Optronics by Judge Davis, and not the one the Federal Circuit was passing on - a quick correction.
Almost three years ago, I posted on Judge Davis' grant of summary judgment of invalidity in a different case, Advanced Display Technologies of Texas v. AU Optronics, 6:11cv011 (7/5/12). Never at a loss for an obscure and bizarre analogy, I observed that "[t]his is how you know that Fast Times At Ridgemont High's Jeff Spicoli could not have been a patent lawyer - because this ruling would have broken his heart."
Why? Because Judge Davis' grant of the defendant's motion for summary judgment of indefiniteness in this case following claim construction proceedings, held that the patent didn't provide a way to distinguish between a modulated surface and a highly modulated surface because it provided no objective means "to determine whether a bump was 'smooth'". "I can't help but picture Spicoli trying to reason his way through this logical conundrum," I wrote. "Of course you could distinguish between modulated and highly modulated, dude, whoaaa," I could picture him saying, certain that to see it any differently would be bogus. Totally.
And remember - this wasn't the indefiniteness standard you kids have today where all you have to show is that the patent doesn't inform a person skilled in the art about the scope of an invention "with reasonable certainty." Pah! No, this was old-school, uphill-both-ways-through-the-snow "it's definite unless it's 'insolubly ambiguous'" indefiniteness. And the court still found it indefinite.
Interestingly, it turns out Advanced Display Technologies wasn't the only such case - a year and a half later Judge Davis similarly granted summary judgment in favor of AU Optronics in a different case brought by plaintiff Eidos Display, affirming a report and recommendation by Judge Love, but on the same ground - invalidity due to indefiniteness. And still under the same exacting - yet now obsolete - standard,
Yesterday the Federal Circuit reversed the summary judgment of indefiniteness in Eidos Display v. AU Optronics, et al,, holding that even under the relaxed standard (and this case is interesting in that it may be the paradoxical result that it is because of the relaxed standard for indefiniteness), the patent was not indefinite. Let that one sink in for a while.
Now I know what you're all thinking - what would Spicoli think about this? Well, remember that the Federal Circuit opinion discloses that the issue was no longer "what the hell does 'a contact hole for source wiring and gate wiring connection terminals' mean?" under pre-Nautilus law. Is it one hole or multiple holes? How could we possibly know?
Instead, the post-Nautilus question was instead what would this limitation suggest to someone knowledgeable about LCD manufacturing? Informed by such a person (such as his history teacher Mr. Hand, shown at right), I think Spicoli would agree with the Federal Circuit that the limitation would clearly, clearly indicate that separate holes would be required, and the idea that it would require only one hole would be deeply, deeply bogus.
So while Spicoli might remain baffled at the outcome in Advanced Display Technologies because obviously he could distinguish between modulated and highly modulated, I think Eidos Display would make some sense to him, (although the Court would have totally lost him on the steering wheels analogy).