April 21, 2023
By Matthew C. Berntsen; Li Zhang, Ph.D.; Alissa K. Lipton; Amy L. Fulton
This is part of a series of articles discussing recent orders of interest issued in patent cases by the United States District Court for the District of Massachusetts.
In Kologik Capital, LLC v. In Force Technology, LLC, No. 18-cv-11168, Magistrate Judge Levenson granted in part the Plaintiff’s motion for further deposition.
During fact discovery, the parties agreed to “work together in good faith to find an alternative deposition date” for a witness. Later, pursuant to an order granting in part the Plaintiff’s motion to compel, the Defendant made a large production of documents, prompting the Plaintiff to seek and the magistrate judge then assigned to the case allowing the Plaintiff to “take three depositions” limited to the late-produced documents. The Plaintiff then noticed the depositions of the witness the parties had previously agreed to, as well as two additional witnesses, one of which was noticed personally and as the Defendant’s Rule 30(b)(6) representative. The Defendant refused to go forward, arguing that (1) the Plaintiff exceeded the limitation of three depositions, and (2) the Rule 30(b)(6) notice was “untimely and unreasonably overbroad.” The Plaintiff filed a motion to take deposition.
The Court noted that its decision would be guided by the goal “to bring the late-production documents into the fold of fact discovery,” not by a “numerical limit on depositions.” The Court then found “some merit in each of the parties’ positions” regarding the Rule 30(b)(6) deposition. On the one hand, the Court saw value in a supplemental Rule 30(b)(6) deposition allowing the Plaintiff to confirm the authenticity of the late-production documents and inquire into practices surrounding business records. On the other hand, the Court found that the Plaintiff’s Rule 30(b)(6) deposition notice failed to provide at least two-weeks’ notice or reasonable particularity on the deposition topics.
Thus, the Court granted in part the Plaintiff’s motion to take deposition. Specifically, the Plaintiff was permitted to notice a deposition to a Rule 30(b)(6) representative on the topics of (1) authentication of late-production documents; (2) corporate practices that implicate the business records exception; and (3) reasons for the late production of documents. The Plaintiff was also permitted to identify additional Rule 30(b)(6) topics, provided that (1) the Rule 30(b)(6) representative must be given at least two-weeks’ notice; (2) the identification of topics must satisfy the particularity requirement of Rule 30(b)(6); and (3) the topics must be limited to subjects arising from the documents contained only in the late production.
In Ocean Semiconductor LLC v. Analog Devices, Inc., No. 20-cv-12310, Judge Saris granted the Defendant’s motion to dismiss without prejudice to repleading. Specifically, the Court determined that claims 1, 6, and 7 of the asserted patent were directed to non-eligible subject matter and that claims 4 and 5 were patent-eligible.
The asserted patent relates to a process for filtering metrology data based on collection purpose in a semiconductor device manufacturing environment. The Court found that claim 1 was directed to the abstract idea of data filtering at step one of the Alice analysis, and was “too general and abstract to add an inventive concept solving a specific technical problem” at Alice step two. The Court noted that “none of the limitations in claim 1” addressed the “specific technical problem mentioned” in the specification.
The Court determined that dependent claims 4 and 5, while also directed to the abstract idea of “filtering,” survived Alice step two “because they carve[d] out a specific innovation as to the use of fault detection data,” which “resolved problems in manufacturing” and “was not routine and conventional.” As to dependent claims 6 and 7, the Court found that the Plaintiff failed to explain how those claims “solve[d] a technical problem with specificity” and thus were “too general to survive step two.”
The Court then decided that it did not need to address the Defendant’s remaining challenges because the Plaintiff only alleged infringement as to “at least” claim 1, which the Court found to be patent-ineligible.
Thus, the Court granted the Defendant’s motion to dismiss without prejudice to the Plaintiff repleading infringement with respect to claims 4 and 5.
In Chr. Hansen HMO GmbH v. Glysosyn LLC, No. 22-cv-11090, Judge Gorton denied the motion of Third-Party Defendant Abbott Laboratories, to sever and stay the litigation with respect to Abbott pending resolution of the declaratory judgment suit filed by manufacturer Chr. Hansen HMO GmbH for a determination non-infringement and invalidity against patent owner and Counterclaim-Plaintiff Glycosyn LLC.
I. Customer Suit Exception
The Court declined to stay the case as to Abbott under the customer suit exception, finding the customer suit exception “inapplicable to the unique facts of this case and [] not a ground for staying.”
a. Traditional Customer Suit Exception Factors
The Court acknowledged Federal Circuit guidance that “in a patent case, litigation brought against or commenced by ‘the manufacturer of infringing goods takes precedence over a suit by the patent owner against customers of the manufacturer.’” In order to permit such a practice, courts have developed a “customer suit” exception to the general rule that favors the forum of the first-filed action.
Courts consider three factors in determining whether the customer suit exception is appropriate:
Here, the Court found that the first factor outweighed the other two and counseled against a stay because Abbott and Chr. Hansen had an “apparent partnership” that indicated that Abbott was more than a mere “end user.”
The Court did not focus on the second and third factors, as Abbott agreed to be bound by the outcome of the claims against Chr. Hansen and Abbott contended that Chr. Hansen is the only source of the product at issue.
b. Other Customer Suit Exception Considerations
The Court also held the customer suit “inapplicable to the unique facts of this case” where the manufacturer Chr. Hansen and the customer Abbott “are defendants with a history of collaboration in the same proceeding in the same forum.” The Court contrasted the instant case with others favoring a stay cited by Abbott which “involved parallel cases that were proceeding against the manufacturer and independent customers in two entirely different districts.”
II. Traditional Stay Factors
The Court found Abbott failed to prove that the traditional stay factors warrant a stay. The Court found the three traditional stay factors to be:
The Court held that the first factor favored denying a stay because staying the case would confer third party status on Abbott and permit Chr. Hansen to gain a tactical advantage during discovery. In support, the Court cited the conduct between the parties in an earlier related ITC litigation between Chr. Hansen and Glycosyn where Abbott refused to comply with a third party document subpoena, and Chief ALJ Bullock found that the requested documents were relevant to Glycosyn’s claims of infringement.
The Court held that the first two factors outweigh the third, and that the case being in its early stages alone does not compel a stay.
In Rasmussen Instruments, LLC v. DePuy Synthes Products, Inc., No. 20-cv-11807, Judge Hillman resolved competing post-trial motions after a “split” jury verdict finding willful infringement.
First, the Court denied Rasmussen’s request for treble damages for willful infringement under § 284, finding that the totality of circumstances including the split verdict and the Defendants’ good faith litigation do not justify enhanced damages.
Second, the Court declined to find the case exceptional and grant Rasmussen’s request for $8,026,998 in attorneys’ fees under § 285, specifically finding that “while both parties vigorously litigated their respective positions, DePuy’s behavior did not rise to the level of litigation misconduct.”
Third, the Court granted Rasmussen’s request for $392,959 in pre-judgement interest, finding that the prime rate – and not the Treasury Bill rate or the Massachusetts state rate of 12% – is appropriate.
Fourth, the Court granted Rasmussen’s request for a permanent injunction against DePuy’s infringing Balanced Sizer product, finding that “Rasmussen has suffered irreparable harm from DePuy’s infringement in the form of lost business opportunity and damaged reputation” and that the “balance of hardship weighs in favor of an injunction, as Rasmussen is a one-person company, whereas DePuy is a large international company with a broad and diversified range of products.”
Fifth, the Court denied both sides’ cross-motions for a new trial and Rasmussen’s motion for judgement as a matter of law, and granted-in-part Defendants’ motion for judgement as a matter of law as to the dismissal of one defendant but otherwise denied it.
Article Series: D. Mass. Patent Litigation Update, District of Massachusetts, patent-eligible, Alice Corp. v. CLS Bank International, litigation stay, exceptional case, injunction
Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm’s clients.
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