D. Mass. Patent Litigation Update: February 2022

This is the third in 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 Blue Engine Biologics v. Arteriocyte Medical Systems Inc., No. 1:21-cv-11098-DJC, on February 10, 2022, Judge Casper denied Defendant’s motion to dismiss direct infringement claims in Blue Engine’s amended complaint, finding Blue Engine had asserted a plausible claim.

On a motion to dismiss, courts conduct a two-step, context-specific inquiry, consistent with Garcia-Catalán v. United States, 734 F.3d 100, 103 (1st Cir. 2013), namely, (1) accepting factual allegations as true, and (2) determining whether the factual allegations present a “reasonable inference that the defendant is liable for the conduct alleged.” In short, courts apply a “plausibility threshold” that “does not demand a high degree of factual specificity.” Id.

Defendant Arteriocyte alleged that Blue Engine had not plausibly alleged that Arteriocyte “itself treats individuals,” a required step in all asserted method claims, because it had alleged that Arteriocyte performs the claims by “internal testing,” “research and development in conjunction with other researchers in the field,” or “through its demonstration and/or use of the Magellan to current and prospective customers,” that is, not during treatment. The Court, however, found it plausible that Arteriocyte had practiced the methods at least once during its own internal testing and demonstrations to customers and that these uses were sufficient to allege direct infringement.

The Court additionally found plausible Blue Engine’s allegations of direct infringement by Arteriocyte’s “research and development in conjunction with other researchers in the field.” Although courts may not ordinarily rely on materials outside of the pleadings, courts may take judicial notice of government agency reports. Here, the Court took judicial notice that clinical trials regarding the Accused Product took place based on reports found on the National Institutes of Health website and concluded that such reports provided support for Blue Engine’s plausible claim that Arteriocyte also practiced the claims during research and development.

In Koss Corporation v. Bose Corporation, No. 1:20-cv-12193-RGS, on February 15, 2022, Judge Stearns denied Plaintiff Koss’s motions to lift a stay pending resolution of an IPR and for injunctive relief, and reserved ruling on its motion to amend pleadings.  Koss objected to Bose’s engagement of a named inventor of the asserted patents as a non-testifying expert and sought “to amend the Complaint, to partially lift the stay to pursue newly added claims, and to enjoin Bose from further work with” the inventor, which work allegedly interfered with the inventor’s obligations to Koss by virtue of assignment agreements and necessarily resulted in the disclosure of Koss’ trade secrets. 

Bose’s counsel represented that Bose had “permanently terminated its consulting relationship” with the inventor, his role was limited to evaluating publicly-available prior art, and that he had not communicated with any Bose personnel.

Acknowledging that the inventor had “given Bose a pair of Koss Cobalt headphones (that were publicly for sale),” the Court observed that “Koss does not allege that [the inventor] was/is in possession of any Koss documents constituting source code, engineering diagrams, or customer lists” and thus there is no demonstrated “substantial risk of imminent harm.”

Accordingly, the Court left the stay pending resolution of pending IPRs in place, denied the motion to enjoy Bose’s continued engagement of the inventor as moot, and reserved the issue of amendment until after the stay is lifted after completion of the IPRs.