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Andrew DeVoogd is a Member in the firm and is based in our Boston office. He focuses on patent litigation, particularly concerning Section 337 investigations in the International Trade Commission, and has participated in all phases of numerous high-stakes ITC investigations involving some of the largest technology companies in the world. Drew has also litigated patent infringement cases and other complex business disputes in federal district courts across the United States. In addition, he provides strategic counseling to help clients protect and leverage IP rights to maximize their value.

On March 20, 2018, the public version of Eastern District of Texas Magistrate Judge Roy Payne’s March 7, 2018 order tossing a $75 million jury verdict obtained by Ericsson against TCL Communication was released.  Ericsson Inc., et al, v. TCL Communication Technology Holdings, Ltd., et al, Case No. 2:15-cv-00011-RSP, Doc. No. 460 (redacted memorandum opinion and order) (E.D. Tex. March 7, 2018) (“Order”).  Judge Payne’s order sheds important light on the damages analysis for infringement of patents covering features of smartphone technology and potentially provides lessons to future litigants seeking damages for smartphone innovations.

After a jury verdict finding infringement, Ericsson also won a damages verdict of $75M due to TCL’s ongoing and willful infringement of U.S. Patent No. 7,149,510 (“the ’510 patent”).  Ericsson contended that the ’510 patent covers smartphone functionality that allows a user to grant or deny access to native phone functionality to a third-party application, which is a standard feature in all Android smartphones.  After trial, TCL moved for judgment as a matter of law on infringement and damages, or in the alternative new trials.  Judge Payne indicated that he was going to uphold the infringement verdict, but ordered a new trial on damages.  Order at 1.

Continue Reading Patent Damages: How Many Essential Features in a Smart Phone?

Further to our ongoing coverage of post-TC Heartland patent litigation, in a recent development from the Northern District of Illinois, the court granted counterclaim defendants’ motion to dismiss for improper venue.  In Shure Incorporated v. ClearOne, Inc., 1-17-cv-03078 (ILND March 16, 2018, Order), the court was blunt in dismissing the plaintiff’s argument regarding the applicability of purported “ancillary” venue.  Plaintiff argued that the doctrine of ancillary venue, where parties are added in conjunction with a compulsory counterclaim are within the court’s supplemental jurisdiction, does not require an independent basis for venue.  The court disagreed, and did not mince words: “[t]his argument is rejected. ClearOne cites no authority for the proposition that the doctrine of ancillary venue (whatever that really is) can override the clear terms of the patent venue statute.”

In properly assessing venue, the court analyzed whether venue was proper under the first part of 28 U.S.C. § 1400(b), which permits a patent infringement action to be brought in the judicial district where the defendant “resides.”  Here, the court dismissed counterclaim defendants’ because both defendants lacked a regular and established place of business in the district.  One defendant was incorporated in Delaware, and the other was based out of California.  The court determined that neither company could be deemed to “reside” in the Northern District of Illinois.

Continue Reading Doctrine of “Ancillary Venue” Does Not Trump <i>TC Heartland</i>

In Drop Stop LLC v. Jian Qing Zhu et al, 2-16-cv-07916 (CACD January 22, 2018), the Central District of California granted Plaintiff’s motion to award attorney fees due to Defendants’ exceptional litigation tactics under 35 U.S.C. § 285.  Initially, counsel for Plaintiff sent a cease and desist email to Defendants to stop selling an infringing product, and attached a draft claim chart in support of its infringement position.  The claim chart included a disclaimer stating “⁠PLEASE NOTE – this informal opinion cannot be relied upon definitively.  A formal opinion is required, and that involves extensive study and other efforts to provide a reliable outcome.  Please call me to discuss.”  However, four days later, Defendants re-listed the accused products and sent Plaintiff an email attaching Plaintiff’s draft claim chart without the disclaimer.  Defendants relied upon Plaintiff’s claim chart to support its non-infringement positions despite not having performed any analysis of their own, and entirely dismissing Plaintiff’s disclaimer, which expressly disclaimed any formal legal opinion.

Continue Reading Improper Reliance on Informal “Opinion of Counsel” Part of Basis for Exceptional Case Award

In an interesting order issued recently in BroadSign International, LLC v. T-Rex Property AB, Judge Swain of the Federal District Court for the Southern District of New York dismissed the Plaintiff’s declaratory judgment of patent non-infringement for a lack of subject matter jurisdiction.  The Plaintiff, BroadSign, is a supplier of “hardware and software solutions for operators of networks of digital displays” and filed its complaint for declaratory judgment against the Defendant, T-Rex, after licensing negotiations stalled between the parties. The declaratory judgment action was based solely on patent infringement lawsuits filed by T-Rex against at least five of BroadSign’s customers.  Although T-Rex had not filed suit against BroadSign itself, BroadSign alleged in its amended complaint that it had received numerous requests for indemnification as a result of T-Rex’s patent enforcement against BroadSign’s customers.  The court concluded that this was insufficient to create subject matter jurisdiction, as there was no “actual case or controversy” between the parties.

Continue Reading Sued Customers Insufficient to Prove a Supplier’s Actual Case or Controversy Against Patentee

In a recent development from the Eastern District of Texas, Magistrate Judge Roy S. Payne concluded that defendants Globalfoundries, Qualcomm, and Samsung waited too long prior to moving to dismiss or transfer the case due to improper venue (see report and recommendation here). KAIST IP US LLC filed its complaint back in November 2016, and a significant portion of discovery already occurred. Similar to In re Micron (which we previously covered here), defendants reserved the right to challenge venue pending the decision in TC Heartland, in their respective answers to the complaint. However, it was not until September 2017, about four months after the decision in TC Heartland issued, that defendant Globalfoundries affirmatively challenged venue. Qualcomm and Samsung filed similar motions a month later. The defendants argued that “after lengthy negotiations… it become clear that KAIST did not have a legitimate, good faith interest in an agreed transfer to a proper venue.”

MJ Payne disagreed, largely because the parties were already immersed in claim construction briefing. MJ Payne opined that “[g]ranting such untimely motions at this stage of the proceeding would disrupt the efficiency of the judicial process, both here and in the proposed transferee district.” Further, MJ Payne was perplexed as to why defendants sat on their hands for four to five months after the TC Heartland decision to move. Accordingly, the court denied defendants motions to dismiss or transfer venue citing In re Micron (affirming a district court’s ability to find forfeiture when a party does not raise a timely objection to venue). We will continue to track any developments regarding this matter.

Further to our ongoing coverage of the post-TC Heartland patent litigation landscape, a pair of recent and interesting cases from Texas and Delaware further evolved this important venue-related jurisprudence.

On November 22, 2017, in Intellectual Ventures II LLC v. FedEx Corp. et al., Case Number 2:16-cv-00980 (E.D. TX Nov. 22, 2017), Judge Rodney Gilstrap denied defendants’ motion to dismiss for improper venue due to their conduct in view of the Federal Circuit’s recent decision in In re Micron, which determined that TC Heartland was a change in the law, potentially reviving venue-based transfer motions previously waived. (We previously covered the In re Micron case here.) Defendants sought to dismiss the case for improper venue a few days after the denial of their IPR petitions. After they participated actively in litigation for months, the court did not take kindly to defendants’ motion. Citing In re Micron, the court reasoned that “defendants who take a ‘tactical wait-and-see’ approach in objecting to venue present ‘an obvious starting point for a claim of forfeiture.’” Further, the court noted that prior to the TC Heartland decision, defendants sought to transfer the case to the Western District of Tennessee under § 1404 rather than § 1406. Judge Gilstrap noted that this reliance on § 1404 was important because that statute “is premised on venue being proper in the transferor court whereas a motion under § 1406 reflects an objection to the current venue as being proper.” Accordingly, the court concluded that defendants’ waived their venue objection based on their own conduct, the judicial resources already expended, and the prejudice to plaintiff in reopening a dormant venue dispute “simply because it has become convenient for Defendants to litigate the issue now.” Continue Reading Lower Courts Continue to Grapple with Venue in the Wake of In re Micron and In re Cray

We first covered the Supreme Court’s grant of certiorari in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 137 S. Ct. 2239 (2017), a case with the potential to substantially alter the patent litigation landscape, back in June. On Monday, November 27, 2017 the Court heard oral arguments on whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) since September 16, 2012 to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum and without a jury.

Advocates and commentators on both sides of the argument weighed in extensively prior to Monday’s argument, culminating in almost 60 amicus curiae briefs, the most of any case this term. Parties urging the Court to reject Oil States’ argument included, for example, the Alliance of Automobile Manufacturers, GE, Apple, the Internet Association (which represents Amazon, Facebook and Google), and the current Solicitor General of the United States, Noel Francisco. On the other side, inventors, venture capitalists, law professors, the Pharmaceutical Research and Manufacturers of America, and the Biotechnology Innovation Organization, amongst others, urged the Justices to abolish inter partes review.  Protesters, including some organized by websites such as www.usinventor.org, gathered outside the Court on Monday to support Oil States armed with signs stating “PTAB Kills American Dreams” and “Innovation: Don’t Kill it!”

Continue Reading Supreme Court Hears Oral Arguments in Oil States Regarding Constitutional Challenge to Inter Partes Review

In June, we covered the Supreme Court’s grant of certiorari in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, 137 S. Ct. 2239 (2017). The Court will decide whether inter partes review – an adversarial process used by the Patent and Trademark Office (PTO) since September 16, 2012 to analyze the validity of existing patents – violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury. With its remarkably high rate of invalidating challenged patents, inter partes review (IPR) has become an effective method for defendants in patent disputes to apply pressure on patent holders, often utilizing serial IPRs to take multiple shots at invalidating patents they infringe. With the potential for IPRs to be declared unconstitutional, some parties have asked courts to stay active litigation until after Oil States is decided. One court in the Northern District of Texas recently denied such a motion to stay in Leak Surveys, Inc. v. FLIR Systems, Inc., 3-13-cv-02897 (TXND 2017-11-13, Order) (Lynn, USDJ). Continue Reading District Court Denies Motion to Stay Pending Supreme Court Decision in Oil States

On November 15, 2017, the United States Court of Appeals for the Federal Circuit resolved a split among district courts on the question whether the United States Supreme Court’s TC Heartland decision constituted a change in the law, or merely a course-correction to honor preexisting law. The Federal Circuit held that the Supreme Court’s decision changed the controlling law. In re: Micron, No. 17-00138 at 13 (Fed. Cir. Nov. 15, 2017).

Micron Technology, Inc. asked the Federal Circuit to set aside the district court’s denial of its motion to dismiss or transfer the case for improper venue. The district court held that Micron waived its objection to venue because it failed to raise an available venue defense in its initial Rule 12 motion to dismiss, and concluded that TC Heartland was not a change in the law.

The Federal Circuit disagreed. It reasoned that the Supreme Court clearly rejected V.E. Holding and concluded that the definition of “resides” in § 1391(c) does not apply to § 1400(b). The Federal Circuit further reasoned that the Supreme Court changed the law by severing § 1400(b) from § 1391(c). As a result, the objection was not “available” under Rule 12(g)(2) when Defendant filed its motion to dismiss in 2016, before TC Heartland came down. On this basis, the Federal Circuit reversed and remanded the case. This decision resolves a previously open question in the wake of TC Heartland that we wrote about here.

In an interesting development in the post-TC Heartland world, it appears that the Federal Circuit will soon answer the question whether the Supreme Court’s venue decision was a change in the law, or merely a course-correction to honor preexisting law. Here, in a case arising out of the Eastern District of New York, the Federal Circuit ordered AlmondNet, Inc., Datonics, LLC, and Intent IQ, LLC to respond to a petition for a writ of mandamus submitted by Yahoo Holdings, Inc.  In its petition, Yahoo argued that the District Court erred in denying its motion to transfer, and specifically that it waived the right to challenge venue on the basis that TC Heartland did not change the law of venue.

Continue Reading Yahoo Asks Federal Circuit to Determine Whether TC Heartland Changed, or Merely Clarified, Venue Rules