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Eastern District of Texas Federal Court Practice http://mcsmith.blogs.com/eastern_district_of_texas/ A web log devoted to practice in the U.S. District Court for the Eastern District of Texas, with special emphasis on patent litigation - published by Michael C. Smith 2014-08-29T18:08:30-04:00 Defendant's JMOLs Denied; Infringement Verdict Affirmed http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/defendants-jmols-denied-infringement-verdict-affirmed.html OPTi Inc. v. Silicon Integrated Systems Corp. et al, 2:10cv279 (8/29/2014) Judge: Rodney Gilstrap Holding: JMOL rulings One of the differences between district judges and appellate judges, I once heard a district judge say, is that appellate judges don't have...
 OPTi Inc. v. Silicon Integrated Systems Corp. et al, 2:10cv279 (8/29/2014)

Judge: Rodney Gilstrap

Holding: JMOL rulings

One of the differences between district judges and appellate judges, I once heard a district judge say, is that appellate judges don't have to deal with JMOLs.  As I have previously noted, I find these orders very interesting because they lay out all of the issues that came up during trial, identify the legal standards applicable to them, and then alayze whether there was evidence as to each. While this makes them very useful to practitioners, it is interesting to note that many judges find preparing them to be less than thrilling.  The distinction between the bench and the bar on this issue might be analogized to a lawyer reading an autopsy report to look for useful nuggets of information for a case, compared to the doctor that is actually having to dissect a corpse to provide those nuggets.  (Yes, these are the thoughts that run through my mind late on a Friday afternoon before a holiday weekend).

As readers may recall, this case was one of the two plaintiff's infringement verdicts in the Marshall Division last year, out of ten infringement cases that were tried. A Marshall jury in Judge Rodney Gilstrap's court returned a verdict that the defendant infringed the asserted claim directly and indirectly, but not willfully, that the claim was not shown to be invalid, and damages reset in the amount of $2.1 million.  Following the jury trial the Court held a bench trial on the defendant's equitable defenses of laches and equitable estoppel and denied those defenses.

In its posttrial motions, the defendant asked the court for judgment as a matter of law and in the alternative for a new trial as to invalidity, literal infringement, indirect ... well, everything. You know where this is going, don't you? I'll be that the Court views the evidence from the trial in the light most favorable to the jury's verdict, and the verdict must be affirmed unless the evidence points so strongly and overwhelmingly in favor of one party that the court concludes that reasonable persons could not arrive at a contrary conclusion.   There may be some court cases that say the same thing.

Anyway, after reviewing the motion, the Court concluded that ample evidence was presented at trial to support the jury's verdict that the claim was not shown to be invalid, that it was shown to be infringed in oh, so many ways, and that the other grounds asserted to justify either judgment as a matter of law or a new trial were not shown to have merit. But in addition to this routine analysis, there are a couple of sections that are worth a second look.

Indefiniteness

The defendant argued that the court should grant judgment as a matter of law that the claim was invalid as indefinite. Well, of course this is actually not a motion for judgment as a matter of law under Rule 50 because it wasn't an issue during the trial because indefiniteness is a matter of law, to be decided by the Court.  And as the Court noted, the parties had already argued indefiniteness at the claim construction hearing, and the Court had previously determined the disputed claims to be not indefinite.

"This portion of VIA's motion must be treated, and charitably so, as a motion to reconsider the Court's Markman Order in light of evidence presented at trial," Judge Gilstrap wrote. But for the reasons set forth in the order, the he found that reconsideration was not appropriate. No new evidence was offered that could not have been presented before he ruled on the issue of indefiniteness, but out of an abundance of caution he did consider the defendants arguments anyway and declined to accept them.

Equivalent Structure Analysis

Another interesting section was in the Court's analysis of the sufficiency of the plaintiffs "way" analysis. (Would this mean that the motion said "no way", I wonder?)  Judge Gilstrap concluded that the defendant could not obtain JMOL simply by demanding another and further level of specificity, "much like a young child repeatedly asking apparent "but why" after each successive explanation." The defendant cross-examined the testimony of the plaintiff's expert to expose flaws in his analysis, and put on its own witnesses on this point. "The jury, in its turn, was free to credit each side's testimony or not, and the Court finds no cause here to second-guess the jury's findings or how they weighed this particular evidence. As stated above, weighing competing evidence and selecting which they find most credible is the essence of the jury's function within our legal system. The court will not infringe upon that function."

I believe that the JMOLs are now pending in the other 2013 Marshall plaintiff win, TQP v. Newegg.  I know some of the Marshall juries' defense verdicts during the year have already been affirmed - the Alexsams come to mind and a few of Judge Gilstrap's Marshall verdicts as well.

Have a happy and safe Labor Day, everyone.  See you Tuesday.

 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-29T18:08:30-04:00 Dallas Morning News on ED Tex Patent Docket Developments http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/dallas-morning-news-on-ed-tex-patent-docket.html Today's Dallas Morning News has another article on the local patent docket by reporter Jeff Bounds. The article notes that the number of new patent infringement lawsuits filed in the Eastern District of Texas hit another record high during the...
Today's Dallas Morning News has another article on the local patent docket by reporter Jeff Bounds. The article notes that the number of new patent infringement lawsuits filed in the Eastern District of Texas hit another record high during the first six months of 2014, with 912 cases, the 26% increase from the previous record a year earlier.  It noted that a disproportionate share of the filings came from a small number of plaintiffs, with almost half of the cases filed by 10 plaintiffs, so the increase may be a short-term aberration.

Pro-plaintiff?

The article notes that while the district has had a reputation for being pro–plaintiff in intellectual property, but notes that reputation may have outlived reality, and quotes Erich Spangenberg, owner of IP Navigation Group, which is responsible for many ED patent filings in recent years that the Eastern District's "reputation as wildly plaintiff friendly is just noise."  (Something Jeff Saltman and I addressed in article in Texas Lawyer and law.com Who're You Calling Plaintiff-Friendly? in April of this year).  Interestingly, Spangenberg was one of only two patent plaintiffs to win a finding of infringement at trial in Marshall last year in ten tries - the other eight infringement trials resulted in defense wins.

While the article doesn't mention our Texas Lawyer article , it does goes on to review other statistics that support that conclusion – a study issued last month by Lex Machina found that plaintiffs won their cases 2.43% of the time while defendants 2.45%, with the rest either settled or dismissed.

Noninfringement & Invalidity most common verdict

And again, one other fact bears mentioning here since I saw a comment recently that noninfringement plus invalidity is rare - the single most common verdict in a patent case asserting infringement and invalidity last year in the Eastern District of Texas - which as I've posted recently tries almost a third of the patent trials conducted nationwide - was a finding of not infringed and claims invalid.  In the ten cases where both issues were submitted to a jury in 2013, plaintiffs lost infringement in seven, and both infringement and invalidity in five.

Lack of criminal docket a major factor for popularity

The article quotes me for an underlying reason for the popularity of the district being the low number of criminal cases in certain divisions, especially when compared to federal courts in major cities which can be backlogged with criminal cases, going back to the Texas Instruments patent filings beginning in 1992.

The article also reviews the judges with the largest number of open patent cases in the country noting that three of the top seven are from the Eastern District of Texas, those being Judge Gilstrap (828), Judge Davis (264) and Judge Schneider (138).  The other four slots are all Delaware judges, ranging from 428 down to 298.
 Commentary Michael C. Smith 2014-08-29T10:21:46-04:00 Anti-Procrastinator FRCP Amendments On Their Way (No, Not The Discovery Ones) http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/anti-procrastinator-frcp-amendments-on-their-way-no-not-the-discovery-ones.html I will be posting in the next few days about the major set of rule amendments dealing with discovery that are set to go before the Judicial Conference next month, but wanted to flag that there are yet more on...
I will be posting in the next few days about the major set of rule amendments dealing with discovery that are set to go before the Judicial Conference next month, but wanted to flag that there are yet more on their way, although these appear to be minor revisions, and not significant changes to the rules - as next month's are.

I would note, however, that practitioners ought to be aware of the proposed change to Rule 6 - it would eliminate the "three additional days" we currently get added to our response time after documents are served electronically. Currently, FRCP 6 adds those three days (which once upon a time were "mail days" before they were extended to fax service and then electronic as well) for every method of service but hand delivery.  And the Eastern District "NC" local rule in CV-6 (if you don't know what that means I'm not saying) plugs the gap by adding the extra three for hand delivery as well, thus avoiding the risk that lawyers might have to do math (kudos to the local rules committee for being vigilant about this). This would take the three days back out of the rule, so, for example, you wouldn't have to keep remembering to add three days to the fourteen in the rule.  (You'd just have to remember to add it in the other three or four scenarios).

But here's why this rule change advances the harmony of the universe despite the real risk of requiring math.   It would fix the inherent illogic in the recent amendments to the FRCPs of having date calculations in multiples of seven under the FRCPs.  These were intended to ensure that if something is filed on a Tuesday the response is due on a ... Tuesday.  No, it's not - it's due three days after that because of FRCP 6.  The "three day" rule throws the whole "multiples of seven" plan into a cocked hat - and for that reason OCD's like me are glad to see it potentially headed for the trash heap.  (I am trying very hard to forget that there's a lcoal rule that usually adds a day anyway, so the whole Tuesday to Tuesday thing is a calculatorial mirage for this reason at well.  I am OCD about many things, but having a response due the same day as the underlying filing is not one of them.  Although now that I think about it ...).

Anyway, editorial rant over.  The three proposed amendments are as follows:

Rule 4. Summons * * *
(m) Time Limit for Service. * * * This subdivision (m) does not apply to service in a foreign country under Rule 4(f), 4(h)(2), or 4(j)(1) * * *.

Explanation: "The Committee recommends publication of a clarifying amendment to ensure that service abroad on a corporation is excluded from the time for service set by Rule 4(m)."

MCS Comment: The tiniest of loopholes is closed.  A moment of  silence would be nice.

Rule 6. Computing and Extending Time; Time for Motion Papers * * *

(d) Additional Time After Certain Kinds of Service. When a party may or must act within a specified time after being served1 and service is made under Rule 5(b)(2)(C)(mail), (D)(leaving with the clerk), (E), or (F)(other means consented to), 3 days are added after the period would otherwise expire under Rule 6(a).

Committee Note:

Rule 6(d) is amended to remove service by electronic means under Rule 5(b)(2)(E) from the modes of service that allow 3 added days to act after being served.

MCS Comment.  Apparently 14 + 3 doesn't result in a multiple of 7.  (Well of course not - it's at least 17 and usually 18.  Depending on what the time is).  See rant supra.

Rule 82. Jurisdiction and Venue Unaffected

These rules do not extend or limit the jurisdiction of the district courts or the venue of actions in those courts. An admiralty or maritime claim under Rule 9(h) is governed by 28 U.S.C. § 1390 not a civil action for purposes of 28 U.S.C. §§ 1391-1392.

Committee Note:

Rule 82 is amended to reflect the enactment of 28 U.S.C. § 1390 and the repeal of § 1392.

MCS Comment: Life is too short to develop an opinion on this.

Comments to these proposed changes are due by February 17, 2015.  Hearings on the civil rules will be held in Washington, D.C., on October 31, 2014, and in Phoenix, Arizona, on January 9, 2015.  Oddly, they're not coming back to Dallas this time.  Was it something I said?  I mean isn't it normal to have a member of the Committee ask you during your testimony "don't you think the judge you're before would sanction you if you did that?"
 Michael C. Smith 2014-08-27T18:07:57-04:00 Motion to Declare Case Exceptional and for Attorneys Fees Denied http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/motion-to-declare-case-exceptional-and-for-attorneys-fees-denied.html Charge Lion v. Linear Technology Corp., 6:12cv769 (8/25/14) Judge: John Love Holding: Motion to Declare Case Exceptional and for Attorneys Fees Denied Following on the heels of Judge Dyk's recent opinion on a request to declare a case exceptional -...
Charge Lion v. Linear Technology Corp., 6:12cv769 (8/25/14)

Judge: John Love

Holding: Motion to Declare Case Exceptional and for Attorneys Fees Denied

Following on the heels of Judge Dyk's recent opinion on a request to declare a case exceptional - and for that matter Judge Davis' as well, is this opinion from Magistrate Judge John Love in Tyler.

The background of this motion dates to last October, when the plaintiff granted LTC a covenant not to sue and moved to dismiss the case with prejudice. LTC opposed, arguing that it's counterclaims should not be dismissed with prejudice, that it should have an opportunity to request attorneys fees, and that the covenant not to sue was not broad enough. Judge Love denied the plaintiff's motion to dismiss, and the parties eventually agreed on a second motion to dismiss with an explicit retention of subject matter jurisdiction for the Court to decide any motion under section 285.

Now you can't blame this motion on Octane Fitness, because not only was the motion filed before the Supreme Court's decision, but in fact all briefing on the motion was completed prior to the decision as well. The parties did not request leave for additional briefing, but LTC did file a notice of supplemental authority after the Supreme Court's decision, which plaintiff objected to.

After setting forth the new standard for motions under 285, Judge Love noted that LTC's argument was that the plaintiff's attempts to extract settlements from each of the defendants evidenced bad faith, and that the plaintiffs lawsuit was frivolous or baseless in light of the fact that four of the 55 accused products in its infringement contentions did not perform a trickle charge operation, and the ones that did have the feature it claimed did not use variable or adjustable reference voltages, and did not have a "means for providing an adjustable reference voltage."

The Court characterized LTC's argument as to bad faith as essentially the allegation that the plaintiff is a "secretive 'shell' corporation that exists for th[e] sole purpose of using the' 702 Patent to extract such settlements." While LTC did present a chart outlining the licensing fees paid by five of the eight defendants the plaintiff sued, and calculated an average payment of $15,188 per defendant the, the court found that this was not sufficient to substantiate its claim that the plaintiff is engaged in extortive litigation tactics, distinguishing a case where the plaintiff had sued over 100 defendants.

With respect to the claim that the infringement claims were frivolous or objectively baseless, while the court believed that that the identified error in the infringement claims showed inattentiveness and even carelessness, it was insufficient to render the case exceptional, since 285 applies to exceptional cases as a whole. Thus given that the infringement claims against 51 of the 55 accused products were arguably reasonable, the error in the infringement contentions was not sufficient to render the entire case exceptional.

LTC also claimed that the plaintiff's claim construction arguments and overall infringement theories were unreasonable and therefore objectively baseless. "While Charge Lion's infringement suit against Linear may be weak," the Court wrote, "it is not 'one that stands out from others with respect to the substantive strength of a parties litigation position'". Judge Love also quoted from a recent Judge Davis opinion which noted that for case dismissed before trial to be designated exceptional, evidence of the frivolity of the claims must be reasonably clear without requiring a "mini-trial" on the merits for attorneys fees purposes. Accordingly, the Court found that LTC's "subjective claim construction arguments, supported by self-serving affidavits," did not render the case exceptional.

From Docket Navigator.
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-27T16:39:09-04:00 Defendant's Motion for Judgment on the Pleadings Granted http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/defendants-motion-for-judgment-on-the-pleadings-granted.html Todd v. Grayson County, Texas, 4:13cv574 (8/20/14) Judge: Ron Clark / Amos Mazzant Holding: Defendant's Motion for Judgment on the Pleadings Granted This is a Texas tort claims act case against Grayson County (now there's a good name for a...

Todd v. Grayson County, Texas, 4:13cv574 (8/20/14)

Judge: Ron Clark / Amos Mazzant

Holding: Defendant's Motion for Judgment on the Pleadings Granted

This is a Texas tort claims act case against Grayson County (now there's a good name for a kid) its Sheriff Keith Gary (formerly known around these parts as Marshal Gary) and one of Sheriff Gary's sergeants.  Judge Mazzant recommended granting the motion to dismiss and Judge Clark agreed, endorsing what he characterized as the "central finding" of Judge Mazzant's report and recommendation, which was that the plaintiff had failed to plead that Grayson County had an unconstitutional policy that caused the plaintiff to be deprived of the federally protected right, and that the plaintiff had failed to plead how any policy or custom was the "moving force" behind her death. Instead, the plaintiff asserted an intentional act, for which the waiver of immunity contained in the Texas Tort Claims Act does not apply.  Judge Clark also accepted Judge Mazzant's conclusions that the claims against the sheriff and the sergeant individually should also be dismissed.

 Eastern District of Texas - Sherman Division Michael C. Smith 2014-08-27T14:39:33-04:00 Unopposed Motion to Dismiss Granted http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/unopposed-motion-to-dismiss-denied.html Olivares v. JPMorgan Chase Bank, N.A., 4:14cv248 (8/21/14) Judge: Ron Clark / Amos Mazzant Holding: Motion to Dismiss GRANTED Well, this one was easy. Defendant filed a motion to dismiss under Twiqbal. Plaintiff didn't respond. Case dismissed.

Olivares v. JPMorgan Chase Bank, N.A., 4:14cv248 (8/21/14)

Judge: Ron Clark / Amos Mazzant

Holding: Motion to Dismiss GRANTED

Well, this one was easy.  Defendant filed a motion to dismiss under Twiqbal.  Plaintiff didn't respond.  Case dismissed.

 Eastern District of Texas - Sherman Division Michael C. Smith 2014-08-27T14:28:58-04:00 Defendant's Motion to Withdraw Guilty Plea Denied http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/defendants-motion-to-withdraw-guilty-plea-denied.html United States v. Rodriguez, 4:10cr242 (8/21/14) Judge: Marcia Crone / Amos Mazzant Holding: Defendant's Motion to Withdraw Guilty Plea DENIED The defendant asked to withdraw her guilty plea, claiming ineffective assistance of counsel. Judge Mazzant recommended the motion be denied,...
United States v. Rodriguez,  4:10cr242 (8/21/14)

Judge: Marcia Crone / Amos Mazzant

Holding: Defendant's Motion to Withdraw Guilty Plea DENIED

The defendant asked to withdraw her guilty plea, claiming ineffective assistance of counsel.  Judge Mazzant recommended the motion be denied, and Judge Crone agreed.  "The record reflects that Defendant has never asserted that she was not involved in a drug conspiracy," she wrote.  "Instead, Defendant has stated that she thought she was participating in a marijuana drug conspiracy. The fact that she later found out that the drug she was transporting was methamphetamine does not support a claim for ineffective assistance of counsel. Defendant simply has not shown that any of her attorneys were ineffective. The Court views this as a case of buyer's remorse. She pleaded to the indictment, and only after receiving her presentence report was Defendant unhappy with her range of punishment. The Court agrees with the Magistrate Judge that under Fifth Circuit precedent, either under the Carr factors or under Strickland, Defendant has not presented a basis to allow her to withdraw her plea."
 Eastern District of Texas - Sherman Division Michael C. Smith 2014-08-27T14:19:24-04:00 When Is A Dollar Like a Ladder? Motion for Attorney's Fees & Costs Granted http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/when-is-a-dollar-like-a-ladder-motion-for-attorneys-fees-costs-granted.html Google v. Beneficial Innovations Inc., 2:11 CV 229 (8/22/14) Judge: Rodney Gilstrap Holding: motion for attorneys fees, costs and expenses granted in part In 1187, Arab armies led by Saladin recaptured Jerusalem from Crusader control, beginning the period. of Muslim...
 Google v. Beneficial Innovations Inc., 2:11 CV 229 (8/22/14)

Judge: Rodney Gilstrap

Holding: motion for attorneys fees, costs and expenses granted in part

In 1187, Arab armies led by Saladin recaptured Jerusalem from Crusader control, beginning the period. of Muslim rule that lasted for more than seven centuries, including occupation by the Ottoman Empire from 1516 until 1917. Ottoman rule brought with it Ottoman property laws, including a Turkish law that dictated that whoever paid for the repair of a structure owned the structure, and whoever owned a building's roof was the owner of that building.

This principle of Turkish law may not be strictly responsible for the fact that a ladder (The Immovable Ladder) has been standing against the second floor balcony of the Church of the Holy Sepulchre in Jerusalem since at least the 17th century, but it is certainly related to it, since the multiple religious orders that are housed in, around, and even on the building jealously guard their interest in it. Thus any attempt to repair the building's roof could, at least during the period of Ottoman rule, have resulted in one obtaining the upper hand is the result of these principles of Turkish law. Thus the Status Quo (the arrangement receives proper noun status) which in the 19th century froze the various communities' interests at their current state, and which requires that no part of what is designated as common territory may be so much as rearranged without consent from all communities.

So, when on a hot summer day in 2002, a Coptic monk moved his chair from its agreed spot into the shade, his action was interpreted as a hostile move by the Ethiopians, and 11 persons were hospitalized after the resulting brawl. In 2004, a door to the Franciscan chapel was left open during an Orthodox ceremony. This was taken as a sign of disrespect and a fistfight broke out.

But it used to be far worse. The entire Crimean war can arguably be traced to an 1844 disagreement over whether the Latins or the Greeks' cloth would be laid on the altar at the site of Jesus' crucifixion on Good Friday. By the time the fighting was over, over 40 people lay dead inside the church, and the issue of the need for Russian protection of Orthodox pilgrims to the holy places in Palestine became an international issue.

But in all of the cases, the conflict arose over the legal effect of something as simple as a ladder, a chair, a door, or even a linen (or silk) altar cloth under the applicable law.

Which brings me to today's opinion by Judge Rodney Gilstrap in Google v. Beneficial Innovations. As readers may recall, on June January 23, 2014, after a three day jury trial, a Marshall jury in Judge Rodney Gilstrap's court reached a verdict regarding plaintiff Google's breach of contract claim against Beneficial Innovations. The jury found that Beneficial had breached a prior settlement agreement between the parties by bringing a lawsuit against Google's customers based on their use of Google's DoubleClick product, and that Google was entitled to recover nominal damages in the amount of one dollar.  As I posted last week, Judge Gilstrap has denied JMOL motion, affirming the jury's verdict.

That nominal damages award of one dollar was the basis for Google's motion for attorneys fees, costs and expenses in this case, since the underlying settlement agreement between Google and Beneficial contained a prevailing party attorneys fees clause. After prevailing at trial, Google sought its attorneys fees, costs and expenses, which Beneficial disputed. After analyzing the specific relief Google sought in the litigation, Judge Gilstrap concluded that it had clearly succeeded with its first request by obtaining a favorable jury verdict as to breach of contract, and while neither side could be said to have prevailed on the issue of patent exhaustion, Google was still "the party prevailing on the contract" and accordingly was entitled to recover reasonable attorneys fees in addition to other costs.

Having made that determination, the court concluded that the attorneys fees requested by Google were reasonable, and that the fee should not be apportioned between the contract and the exhaustion claims. It did, however, find the Google had not shown that its expert fees were recoverable under the parties agreement. Accordingly it reduced Google's total fees and costs request by $101,324.50, and awarded Google a total of $1,302,673.27 for fees and costs. The court also declined to include an express declaration Google requested in the final judgment, finding that the request was an exact duplication of the jury's verdict, and thus would be redundant.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-26T14:54:03-04:00 Motion to Reconsider Order Adopting Recommendation by Magistrate Judge Granted http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/motion-to-reconsider-order-adopting-recommendation-by-magistrate-judge-granted.html Butler v. Allstate Heritage Life Insurance Company, 4:13cv199 (8/14/14) Judge: Ron Clark/Amos Mazzant Holding: Motion to Reconsider Order Adopting Recommendation by Magistrate Judge Granted Earlier in this case, Judge Mazzant issued a report and recommendation recommending that defendants motion to...
Butler v. Allstate Heritage Life Insurance Company, 4:13cv199 (8/14/14)

Judge: Ron Clark/Amos Mazzant

Holding: Motion to Reconsider Order Adopting Recommendation by Magistrate Judge Granted

Earlier in this case, Judge Mazzant issued a report and recommendation recommending that defendants motion to dismiss be granted. Judge Clark subsequently adopted the report. Plaintiff now asked that that the order adopting that report and recommendation be reconsidered and the plaintiff's case be reopened for consideration of his claims for breach of contract, wrongful termination, and fraud. Judge Mazzant issued a report and recommendation recommending that the motion be granted, and the case be reopened.

Judge Clark rejected the defendants objection that the legal standard applicable to a motion to reconsider was misapplied, accepted Judge Mazzant's conclusion that there were grounds that merited reconsideration of the court's previous decisions, and granted the motion reopening the case so that the plaintiffs claims for breach of contract, wrongful termination, and fraud could be considered.
 Eastern District of Texas - Sherman Division Michael C. Smith 2014-08-25T12:57:47-04:00 Summary Judgment Granted in ERISA Case http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/summary-judgment-granted-in-erisa-case.html Torres v. Liberty Life Assurance Co., 4:13cv140 (8/14/14) Judge: Ron Clark / Amos Mazzant Holding: Defendants Motion for Summary Judgment Granted This is an ERISA case alleging that the defendant wrongfully denied the plaintiffs claim for long-term disability under a...
Torres v. Liberty Life Assurance Co., 4:13cv140 (8/14/14)

Judge: Ron Clark / Amos Mazzant

Holding: Defendants Motion for Summary Judgment Granted

This is an ERISA case alleging that the defendant wrongfully denied the plaintiffs claim for long-term disability under a policy purchased by the plaintiff's employer. Magistrate Judge Mazzant concluded that the defendant's decision was not an abuse of discretion and was supported by substantial evidence in the administrative record, and recommended that the motion be granted.

In reviewing Judge Mazzant'sreport, Judge Clark rejected the plaintiffs objections that an affidavit should have been stricken, and that to additional job description submitted by the plaintiff should have been considered. The court also affirmed Judge Mazzant's consideration of hearsay, finding that the plan administrator was not required to base eligibility decisions on sworn testimony subject to cross-examination, and that the statement could be considered by the reviewing court.
 Eastern District of Texas - Sherman Division Michael C. Smith 2014-08-25T12:40:06-04:00 There is nothing about the Eastern District of Texas in today's Texas Lawyer. But ... http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/there-is-nothing-about-the-eastern-district-of-texas-in-todays-texas-lawyer-but-.html ... I am really enjoying Quentin Brogden's article on page 25 about the "information acted on" exception to the hearsay rule. Have to remember this the next time I'm at trial trying to get hearsay in. Uh, I mean introduce...
... I am really enjoying Quentin Brogden's article on page 25 about the "information acted on" exception to the hearsay rule.  Have to remember this the next time I'm at trial trying to get hearsay in.  Uh, I mean introduce highly relevant testimony about information acted upon, which is not being offered for the truth of the matter asserted.

I miss trial.
 Commentary Michael C. Smith 2014-08-25T11:06:02-04:00 The Relationship between Contentions and Expert Reports http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/the-relationship-between-contentions-and-expert-reports-1.html An issue in local practice under the Patent Local Rules is the relationship between contentions, whether they be infringement or invalidity, and the reports of experts who will present those contentions to a jury. The issue of when there is...
An issue in local practice under the Patent Local Rules is the relationship between contentions, whether they be infringement or invalidity, and the reports of experts who will present those contentions to a jury. The issue of when there is "good cause" to amend contentions under P.R. 3-6 gets a great deal of attention, but in recent opinions, the Eastern District has provided some guidance on the significantly rarer issue of when an expert's report impermissibly expands the contentions previously disclosed under Patent Rules 3-1 and 3-2 or 3-3 and 3-4, as the case may be.

First of all, the legal standards in this area are clear. Expert reports may not introduce theories not previously set forth in contentions, but the scope of the two is not the same. In referring to infringement contentions, for example, the Court has told us that they need not disclose "specific evidence nor do they require plaintiff to prove its infringement case".  But on the other hand, expert reports must include a complete statement of the expert's opinions, the basis and reasons for them, and any data or other information considered when forming them. See FRCP 26(a)(2)(B).

The report cannot accuse new products nor advance new theories - that much is clear. But it appears that it can refer to previously un-accused products in relation to accused products - it just can't add new products to those it identified in as accused in its contentions. And it can use language not in the contentions, so long as the concept has been previously disclosed. The test for when new language is permissible is whether the contentions provided "adequate notice" of the theories the report contains.

MCS3164; MCS1800; MCS 1365

 Eastern District of Texas - Marshall Division Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-22T17:10:53-04:00 The Relationship between Contentions and Expert Reports http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/the-relationship-between-contentions-and-expert-reports.html An issue in local practice under the Patent Local Rules is the relationship between contentions, whether they be infringement or invalidity, and the reports of experts who will present those contentions to a jury. The issue of when there is...
An issue in local practice under the Patent Local Rules is the relationship between contentions, whether they be infringement or invalidity, and the reports of experts who will present those contentions to a jury. The issue of when there is "good cause" to amend contentions under P.R. 3-6 gets a great deal of attention, but in recent opinions, the Eastern District has provided some guidance on the significantly rarer issue of when an expert's report impermissibly expands the contentions previously disclosed under Patent Rules 3-1 and 3-2 or 3-3 and 3-4, as the case may be.

First of all, the legal standards in this area are clear. Expert reports may not introduce theories not previously set forth in contentions, but the scope of the two is not the same. In referring to infringement contentions, for example, the Court has told us that they need not disclose "specific evidence nor do they require plaintiff to prove its infringement case".  But on the other hand, expert reports must include a complete statement of the expert's opinions, the basis and reasons for them, and any data or other information considered when forming them. See FRCP 26(a)(2)(B).

The report cannot accuse new products nor advance new theories - that much is clear. But it appears that it can refer to previously un-accused products in relation to accused products - it just can't add new products to those it identified in as accused in its contentions. And it can use language not in the contentions, so long as the concept has been previously disclosed. The test for when new language is permissible is whether the contentions provided "adequate notice" of the theories the report contains.

MCS3164; MCS1800; MCS 1365

 Eastern District of Texas - Marshall Division Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-22T17:10:51-04:00 Motion to Transfer Venue Granted Under "First to File" Rule http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/motion-to-transfer-venue-granted-under-first-to-file-rule.html RPost Holdings, Inc. v. Sophos, Inc., 2:13cv959 (8/20/2014) District Judge Rodney Gilstrap Holding: Motion to Transfer Venue GRANTED This case presents application of the "first to file" rule with respect to motions to transfer venue alleging that the case was...
RPost Holdings, Inc. v. Sophos, Inc., 2:13cv959 (8/20/2014)

District Judge Rodney Gilstrap

Holding: Motion to Transfer Venue GRANTED

This case presents application of the "first to file" rule with respect to motions to transfer venue alleging that the case was first-filed somewhere else.  Citing the seminal (and well-written) opinion by his predecessor Judge Sam B. Hall, Jr. in the first Marshall patent case, Texas Instruments, Inc. v. Micron Semiconductor, Inc., 815 F. Supp. 994, 997 (E.D. Tex. 1993), Judge Gilstrap noted that in determining whether to apply the first-to-file rule to an action, a court must resolve two questions: 1) are the two pending actions so duplicative or involve substantially similar issues that one court should decide the subject matter of both actions; and 2) which of the two courts should take the case?  Once the "substantial similarity" threshold is crossed, the first-to-file rule accords the first-filed court the responsibility to determine which case should proceed?

Here the plaintiff said that it intended to be the first-filed court, but due to computer problems, didn't make it till the next day.  Judge Gilstrap declined to create an exception to the general rule under the circumstances of this case, and transferred the action.

From Docket Navigator
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-22T15:35:22-04:00 Texas A&M University - Commerce magazine profile http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/texas-am-university-commerce-magazine-profile-.html As many readers of this blog are aware, before attending Baylor Law School and getting a master's degree at UT - Austin, I was already a proud graduate of East Texas State University, which has since became Texas A&M University-Commerce....
As many readers of this blog are aware, before attending Baylor Law School and getting a master's degree at UT - Austin, I was already a proud graduate of East Texas State University, which has since became Texas A&M University-Commerce. (I am still ambivalent about being an ex post facto Aggie, but that's for another post).

Earlier this year, I sat down with a reporter from The Update, the school's College of Humanities, Social Sciences and Arts newsletter, for a profile story for the Update and the TAMU-C alumni magazine. In addition to discussing the work we did to transform the Hub Shoe Store into the Marshall office of Siebman, Burg, Phillips & Smith, LLP, we also talked about a variety of other topics, including my work on this blog to provide readers with news from the Eastern District of Texas, and how my activities long, long ago, on a campus far, far away have affected my life today.

The story title came from a picture of me looking through one of the "hidden doors" in my office, which you may know are a favorite of my sons when they stop in after school (it is, after all, their room upstairs). You can read the entire article here.   See if you notice any resemblance to the fellow in this photo.

Thanks to Prof. J.D. Isip, who wrote the article, and photographer Jared Horn.
 Commentary Michael C. Smith 2014-08-22T14:26:38-04:00 Another great issue of the Texas Bar Journal http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/another-great-issue-of-the-texas-bar-journal.html I could't find myself anywhere in the disciplinary or obituary sections. Now that's a great issue.
I could't find myself anywhere in the disciplinary or obituary sections. Now that's a great issue.
 Commentary Michael C. Smith 2014-08-22T13:45:36-04:00 How Judges Use Technology http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/how-judges-use-technology.html I have been on the planning committees for two seminars that will take place the last week of October, the 38th Annual Page Keeton Civil Litigation Conference presented by UT Law CLE at the Four Seasons Hotel in Austin on...
I have been on the planning committees for two seminars that will take place the last week of October, the 38th Annual Page Keeton Civil Litigation Conference presented by UT Law CLE at the Four Seasons Hotel in Austin on October 23 – 24, 2014, and the annual Eastern District of Texas bench/bar, which will take place in Plano from October 22 – 24.  Not for the first time, I am reminded of the saying that "[t]ime is the quality of nature that keeps things from happening all at once.  Lately it doesn't seem to be working."

On both committees, I have been advocating looking into teaching attendees how judges use technology these days, including whether lawyers need to prepare their written materials differently for judges that will be viewing them in electronic format, rather than written.  (The answer is yes - attend one of the two aforesaid conferences to find out why and how).

The issue is a timely one - in fact the Eastern District's rules were amended earlier this year to provide guidance for hyperlinking cases, so the idea of making online filings even more useful is a timely one.  And the sight of local judges at seminars with iPads in hand issuing rulings commando, as it were, is growing more and more common.  (I recall one day a few months back where I was reading emails instead of paying attention to a speaker at a seminar and another lawyer indicated that a certain judge wasn't going to be signing orders in our case till Monday because they were out of town at a seminar.  I looked to my right and there the judge was, sitting next to me happily signing away on their iPad).

This morning, I saw a new article on the subject by Nicole Black in Above the Law, A Federal Judge And His iPad, which interviews Second Circuit judge Richard Wesley.   Today's article explains how Judge Wesley uses technology and likes it - the second installment in two weeks will reveal what he doesn't like.  I enjoyed today's, and look forward to September's when it comes out.
 Commentary Michael C. Smith 2014-08-22T11:52:36-04:00 Google verdict of $1 Against Patentee Upheld http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/google-verdict-of-1-against-patentee-upheld.html Google v. Beneficial Innovations Inc., 2:11cv229 (8/22/14) Judge: Rodney Gilstrap Holding: Defendants Motion for Judgment As a Matter of Law Denied As readers may recall, on January 23, 2014, after three day jury trial, a Marshall jury in Judge Rodney...
 Google v. Beneficial Innovations Inc., 2:11cv229 (8/22/14)

Judge: Rodney Gilstrap

Holding: Defendants Motion for Judgment As a Matter of Law Denied

As readers may recall, on January 23, 2014, after three day jury trial, a Marshall jury in Judge Rodney Gilstrap's court reached a verdict regarding plaintiff Google's breach of contract claim against Beneficial Innovations. The jury found that Beneficial had breached a prior settlement agreement between the parties by bringing a lawsuit against Google's customers based on their use of Google's DoubleClick product, and that Google was entitled to recover nominal damages in the amount of one dollar. Beneficial filed a motion for judgment as a matter of law asking Judge Gilstrap to set aside the jury's verdict.

Beneficial's argument was that Google had not met its burden of proving that the customers' use of DoubleClick would constitute indirect infringement by Google, claiming that the license only covered the customers' use of a product or service to the extent that such use would constitute direct or indirect infringement by Google but for the license. The Court noted that at trial, Google presented two theories of indirect infringement, which Beneficial now contended were not supported by substantial evidence.

As an aside, this is not an easy order to follow, because Google, in the unusual position of the plaintiff, had to prove that its customers' use of the service directly infringes the asserted patents in order to prove indirect infringement, and thus bring the usage under the license. Further taking us through the looking glass, Beneficial's assertions in its complaint and infringement contentions that the customers were infringing served as evidence of direct infringement, and supported the jury's finding to that effect, meaning that the pleadings and contentions in this case by the defendant patentee provided factual matter which constituted a party admission – here a defendant arguing that the plaintiffs customers infringe, which was a necessary element of the plaintiffs cause of action. I'm glad that I have been watching my new set of Twin Peaks episodes this week or this would be really confusing.

Beneficial next asserted that Google had not carried its burden of proof as to contributory infringement by its customers. Judge Gilstrap reviewed the facts and concluded that a reasonable jury could have concluded as it did. The finding was the same with respect to Beneficial's argument that Google had failed to meet its burden of proving induced infringement – there was evidence from which a reasonable jury could have concluded as it did. Again, I have to reiterate that the argument here is that the patentee is arguing that the defendant failed to present substantial evidence that it either actively encouraged its customers to infringe the asserted claims, or that it specifically intended its customers to infringe the patentee's patents. This is starting to remind me of a recent book I read on how subatomic particles perform. It's actually not that complicated once you accept that everything works the opposite way from the way you think it would.  (Actually, since I am married this all makes a lot more sense than it ought to.  Nobody tell my wife I said that, okay?)

In conclusion, the Court found the Google had presented substantial evidence to the jury demonstrating that its customers' use of DoubleClick would constitute indirect infringement – both contributory and induced – by Google, but for the license. Under the terms of the settlement agreement between Google and Beneficial, once that condition had been satisfied, the accused Google customers were licensed to use Beneficial's patented technologies. Therefore, the Court declined to disturb the jury's verdict that Beneficial had breached the settlement agreement by bringing the instant lawsuit against the accused Google customers.

I'm going to go read some nice simple civil rights cases now, and make sure I haven't been drinking decaf.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-22T09:53:36-04:00 Motion to Stay Pending Covered Business Method Review Denied Without Prejudice http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/motion-to-stay-pending-covered-business-method-review-denied-without-prejudice.html Smartflash v. Apple, 6:13cv447 (7/8/14) Judge: K Nicole Mitchell Holding: Motion to Stay Pending Covered Business Method Review Denied Without Prejudice After reviewing the applicable legal standards and the facts, the Court concluded that the current status of the case...
Smartflash v. Apple, 6:13cv447 (7/8/14)

Judge: K Nicole Mitchell

Holding: Motion to Stay Pending Covered Business Method Review Denied Without Prejudice

After reviewing the applicable legal standards and the facts, the Court concluded that the current status of the case weighed slightly in favor of staying the action, the possible issue simplification and prejudice factors weighed against staying the action, and the burden factor was neutral. Accordingly, "balancing the factors in whole" they favored denying the motion to stay at this time. The court noted that once the PTO decides whether it will grant review, the Court will better be able to analyze the full repercussions of granting or denying a stay. Accordingly, the motion was denied without prejudice.
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-21T17:11:35-04:00 Joint Motion to Seal Portions of the Trial Transcript Granted in Part http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/joint-motion-to-seal-portions-of-the-trial-transcript-granted-in-part.html Sabatino Bianco, M.D. v. Globus Medical, Inc., 2:12-cv-147 (7/14/2014) Judge: William C. Bryson Holding: Joint Motion to Seal Portions of the Trial Transcript Granted in Part And here I thought Rosie the Riveter had the corner on patriotism. Stenographers, this...
 Sabatino Bianco, M.D. v. Globus Medical, Inc., 2:12-cv-147 (7/14/2014)

Judge: William C. Bryson

Holding: Joint Motion to Seal Portions of the Trial Transcript Granted in Part

And here I thought Rosie the Riveter had the corner on patriotism.  Stenographers, this one's for you.

Judge Bryson's opinion begins by setting forth the underlying principle that judicial proceedings in this country are to be conducted in public, and the rules applicable to requests to seal portions of the transcript of a trial. Towards the bottom of page 3 of the opinion, the court finishes with the law and begins to steer into the facts of the case, noting that the parties have moved to seal "significant portions" of the trial transcript, which despite the parties' characterization as "narrowly tailored excerpts" consist of nearly 100 portions of the transcript.

Judge Bryson was not persuaded that the excerpts were in fact "narrowly tailored", and noted that in their motion the parties had provided only a "bare-bones" explanation for why they believe sealing is necessary. While this absence of detail could, by itself, be deemed a failure to articulate a compelling reason that outweighs the general public policy favoring disclosure of court records, the Court noted that in earlier pleadings the parties had provided more detailed arguments. Although those arguments pertained to pleadings and orders, and not trial testimony, and were not re-argued in the current motion, the court assumed that the parties intended those arguments to be applicable, and therefore considered them as though raised.

The court concluded that sealing was appropriate for certain portions of the transcript revealing details of the invention disclosure they were not disclosed elsewhere in the public record. It also held that sealing was appropriate for very limited portions of the transcript relating to the nature of a presentation at issue. However, the court rejected the parties' request relating to the royalty rates for the design team and certain applicable profit margins.

The Court also noted that the parties request for sealing was contradicted to some extent by their failure to take "appropriate measures" to protect the material that they now wish to have sealed, specifically no request to close the courtroom was ever made during the trial, nor did the parties ever alert the court that they objected to public disclosure of certain portions of the testimony. Even after the issue was raised during the proceedings, the parties continue to not ask to have the courtroom closed or materials protected during hearings on sensitive issues.  Nonethess the Court would not infer waiver.  "Because the Court did not flag this issue for the parties prior to trial," Judge Bryson wrote, "the Court will not treat the parties' lax  approach to the issue of protecting sensitive information from public disclosure as a waiver of their right now to seek sealing of the trial testimony."

The Court also perceived as a problem that the parties were asking to seal information, the substance of much of which had already been publicly disclosed, either through unsealed filings or in portions of the trial transcript that the parties had not moved to have sealed. The court helpfully provided not only citations to the record locations, but detailed the information that was sought to be sealed, but which was already in the record, and in some cases publicly reported. In the spirit of the Court's order, I am happy to note that those included "allusions to Globus's royalty base profits of more than $100 million on Caliber and Rise (1/13/14 PM Tr. 10:6-12, 22:16-19; 1/15/14 AM Tr. 79:22-80:4), and net profits of $38.5 million (1/15/14 AM Tr. 46:6-12, 61:21-62-7, 77:17)."  (You know, this is kind of fun ... when it's not my case).

The Court did agree to seal portions of the drawings, which the jury had found to be trade secrets, where they consisted of more detailed accounts of the drawings that had not otherwise been made public. Again, the Court noted specifically the descriptions of the drawings that were already a matter of public record. Similarly, the Court declined to seal information regarding royalty rates and excerpts of the transcript relating to the plaintiff's presentation to a third-party, given the information disclosed during the course of trial, again specifically noting transcript locations including in some cases citations to the opening and closing arguments.

Finally, the Court stayed the effect of the order for 10 days in the event that the parties wished to seek modification, reconsideration, or appellate review the court's decision. Since it is a slow day here on the farm waiting for somebody to get themselves in trouble across the proverbial way, I checked the docket, and neither party filed any objections to Judge Bryson's order, thus the redacted transcripts have now made their way onto the court docket.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-20T16:37:55-04:00 VICE News article on patent litigation http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/vice-news-article-on-patent-litigation.html While my family and I were on vacation last month, I traded emails with Justin Rohrlich, a reporter for VICE News (shown at right discussing the issue of patent litigation trends with Mr. T) who was working on a story...
While my family and I were on vacation last month, I traded emails with Justin Rohrlich, a reporter for VICE News (shown at right discussing the issue of patent litigation trends with Mr. T) who was working on a story that eventually ended up as Trolling the Patent Troll Myth.  The article provides good analysis on the issues discussed in the recent 2014 PricewaterhouseCoopers (PwC) study on patent litigation, As case volume leaps, damages continue general decline.

Those in the business will probably find Justin's article interesting - I apologize for the delay getting a post on it up.  I know we've all been wondering what which fool Mr. T pities on this issue.  (Those of you under 40 have no idea what I'm talking about, do you?  Well, that's what the Internet is for - see here.)
 Commentary Michael C. Smith 2014-08-20T12:02:11-04:00 Verdict of Noninfringement and Invalidity Stands; Court Costs Awarded http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/verdict-of-noninfringement-and-invalidity-stands-court-costs-awarded.html Cassidian Communications v. MicroDATA, et al., 2:12cv162 (8/12-ish/14) Judge: Rodney Gilstrap Holding: Post Verdict Rulings; Court Costs Last December, after a five-day jury trial, a Marshall jury in Judge Rodney Gilstrap's court found for the defendant on both infringement and...
 Cassidian Communications v. MicroDATA, et al., 2:12cv162 (8/12-ish/14)

Judge: Rodney Gilstrap

Holding: Post Verdict Rulings; Court Costs

Last December, after a five-day jury trial, a Marshall jury in Judge Rodney Gilstrap's court found for the defendant on both infringement and invalidity, finding that none of the asserted claims were infringed and all of the asserted claims were invalid. Judge Gilstrap granted the plaintiff's motion for judgment as a matter of law that the asserted claims were not indefinite, were not invalid for being obvious, and no asserted dependent claims were invalid for being anticipated, as was the defendants motion for judgment as a matter of law that there was no direct infringement of five defendant claims. Judge Gilstrap recently ruled on the plaintiffs motions for judgment as a matter of law on both infringement and invalidity, denying the former, but granting the latter in part, and resolving the parties disputes is to court costs.

Motion for Judgment As a Matter of Law

With respect to infringement, as is the case with most challenges to a jury's factual finding as to infringement, the challenge failed. While the great weight of the evidence confirmed that the defendant did infringe one element of the claim, the Court observed, it was not against the great weight of the evidence for the jury to find that other claim elements were not satisfied, and thus the noninfringement verdict would stand.

With respect to invalidity, the plaintiff asked the court to set aside the finding of invalidity by finding that there was not legally sufficient evidence by which a reasonable jury could have found any claim of the patent invalid under the theories of (1) improper inventorship; (2) anticipation; or (3) lack of written description or enablement.  With respect to anticipation, the court found that no reasonable jury could have found that the claimed reference to disclosed each and every element of the claim, and therefore granted the motion for judgment as a matter of law that defendants had failed to prove by clear and convincing evidence that the cited reference anticipated the referenced claim of the asserted patent. Similarly, with respect to the claim of lack of written description or enablement, the court found that the expert's testimony consisted of a series of "yes" and "no" answers without any reason for the answers. These "ipse dixit statements that the apostrophe 858 patent failed the written description and enablement requirements cannot be sufficient to constitute clear and convincing evidence," the court concluded, granting the motion for judgment as a matter of law on this ground as well.

However, After a lengthy recitation of the factual record, Judge Gilstrap concluded that the verdict of improper inventor ship was not against the great weight of the evidence, and accordingly denied the plaintiff's motion for new trial on this basis.  The finding of improper inventorship standing alone was sufficient to support the judgment of invalidity, so the JMOL was denied, leaving the jury's verdict of noninfringement and invalidity undisturbed.

Court Costs

The Court's resolution of the parties disputes over court costs is interesting because it makes reference to the Tyler Division's "Standing Order regarding Bill of Costs". That order's provisions regarding incidental costs associated with depositions helped provided the basis for the Court's ruling that while appearance fees for reporters and videographers were recoverable costs, fees for rough ASCII and rough draft were merely incidental costs not recoverable under the statute.  The resubmitted costs were approved in the amount of $90,161.05.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-19T16:38:51-04:00 Motion to Dismiss for Improper Venue Granted http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/motion-to-dismiss-for-improper-venue-granted.html CSIRO v. Real Communications, 6:12cv842 (8/8/14) Judge: Leonard Davis Holding: Defendant's Renewed Motion to Dismiss Granted Defendant moved to dismiss for improper venue. The Court denied the motion and permitted jurisdictional discovery, and at the conclusion of the discovery defendant...
CSIRO v. Real Communications, 6:12cv842 (8/8/14)

Judge: Leonard Davis

Holding: Defendant's Renewed Motion to Dismiss Granted

Defendant moved to dismiss for improper venue. The Court denied the motion and permitted jurisdictional discovery, and at the conclusion of the discovery defendant renewed its motion.  While plaintiff argued that venue is proper because the defendant allegedly placed a parent company's products into the stream of commerce to sales, the Court noted that the facts showed that the defendant did not actually sell, distribute, deliver, or manufacture any product, let alone the accused product, and what marketing and sales attempts were shown to have occurred did not take place in the Eastern District of Texas. "Ultimately," the Court concluded, "there is no evidence that Real Communications actually places or uses a subsidiary to place any product into the stream of commerce," and accordingly rejected jurisdiction under the stream of commerce theory.

The Court also rejected the alternative theory that personal jurisdiction was proper by imputing the business of the defendants parent to it. The court noted that while the reverse situation is much more common – jurisdiction over a foreign parent company is sought through the subsidiary's local activities, the same legal principles applied in both cases. However the Court found that the facts in this case were not sufficient to show that the subsidiary was the alter ego of the parent under Fifth Circuit precedent.

Accordingly, the Court granted the defendants renewed motion to dismiss and dismissed all claims against it. It noted, however, that the defendant remained a party to the suit for purposes of its pending motion for sanctions.
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-19T12:29:48-04:00 Are Summary Judgment Motions Required for Exceptional Case Findings? http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/are-summary-judgment-motions-required-for-exceptional-case-findings.html A couple of weeks ago I posted on Judge Dyk's order denying a section 285 is exceptional case motion in Stragent, LLC v. Intel Corp.. This morning, David Donoghue's Retail Patent Litigation blog had a useful commentary on the opinion...
A couple of weeks ago I posted on Judge Dyk's order denying a section 285 is exceptional case motion in Stragent, LLC v. Intel Corp..  This morning, David Donoghue's Retail Patent Litigation blog had a useful commentary on the opinion that is worth a look.

David starts by observing that this opinion is a good place to start when preparing an exceptional case brief (which it certainly is), and then notes a practical problem with the opinion's position that the defendant's argument that the plaintiffs infringement theory was "implausible" because defendant never sought summary judgment.

"This is an interesting and troubling position for retailers," David writes (and I would add for all parties).  "While there is a significant advantage in seeking summary judgment whenever possible, there are often "implausible arguments" that are not amenable to summary judgment because of potential questions of material fact, or even the timing of the motion and the Court's time to decision relative to the trial date.  So, equating a lack of a summary judgment motion with a lack of confidence in a defendant's arguments is an unfair link, even if it is sometimes true.  Hopefully, district judges will make this distinction and this will not become a standard view across district courts."

I would add one more comment to David's, and that is to emphasize that if courts held that a failure to file a motion - either for summary judgment or on a discovery issue, to dig a little deeper into the opinion - equated to waiver of the ability to raise allegations or conduct later, it would encourage the decidedly unhelpful practice, from a docket management viewpoint, to say nothing of the fees parties would have to incur, of parties filing motions on every conceivable issue simply to "preserve" the issue for possible inclusion in a fees motion at the conclusion of the case.  This would be the case even when – as David points out – the party knows that the summary judgment standard would likely preclude the motion being granted, or as I would point out – the party knows that the court would expect that the issue would be worked out without filing a motion, and in the absence of a preservation consideration it would be.

Of course perhaps the issues in Stragent were particularly hyperbolic arguments that were appropriately hoisted by their collective petards because they would have been appropriate subjects for summary judgment or discovery sanctions.  (Not that I ever make over the top allegations in 285 motions, of course, but I have heard it may have happened a time or two). If that was the case, then the failure to file motions would undercut the credibility of the arguments and thus be a fair observation.  And there is prior case law in the district on these points (perhaps more so on the discovery motions side of the question, now that I think about it).  In any event, it will be interesting to see what guidance the Eastern District courts provide in coming months to practitioners as to the issues raised in the Stragent opinion.
 Commentary Michael C. Smith 2014-08-19T11:53:24-04:00 GeoTag pretrial conference off http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/geotag-pretrial-conference-off.html Two weeks ago, I posted on Judge Payne's report and recommendations in GeoTag v. Domino's Pizza, 2:10cv572 (8/1/14) recommending Domino's Pizza's motion for summary judgment of noninfringement be granted. This morning's Texas Lawyer has an article Domino's Delivers Emergency Motion,...
Two weeks ago, I posted on Judge Payne's report and recommendations in GeoTag v. Domino's Pizza, 2:10cv572 (8/1/14) recommending Domino's Pizza's motion for summary judgment of noninfringement be granted.  This morning's Texas Lawyer has an article Domino's Delivers Emergency Motion, reports on that issue.  It also notes that Domino's subsequently filed an emergency motion to cancel the pretrial conference (set for today) following the report, and that GeoTag has filed objections to the report and recc.

I wanted to update the story with a post-press-time updates - on Thursday Judge Payne granted the motion, thus the pretrial in the last of the original GeoTag cases set to go to trial this fall was cancelled.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-18T16:05:25-04:00 Stay Granted Pending CBM Review in Datatreasury Litigation http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/stay-granted-pending-cbm-review-in-datatreasury-litigation.html Will post tomorrow with the odd detail.
Will post tomorrow with the odd detail.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-14T18:13:01-04:00 Indefiniteness in the ED Tex After Nautilus http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/indefiniteness.html No, not the heavy metal band - they just had a useful logo. Multiple opinions from ED judges in recent weeks on the subject of indefinitness under the new standard set forth in Nautilus. As you might expect, the outcomes...
 No, not the heavy metal band - they just had a useful logo.

Multiple opinions from ED judges in recent weeks on the subject of indefinitness under the new standard set forth in Nautilus.  As you might expect, the outcomes are dependent on the specific claims at issue.  As I posted several weeks ago, one court has already found all the remaining asserted claims in a case indefinite (another has found some where, but others were not), while several others in both Marshall and Tyler have found that the asserted claims were not indefinite, even under the new standard.

 In multiple cases the courts did so by rejecting the argument for indefiniteness, concluding that the terms at issue were fact "easily understood" by those skilled in the art.  In others the judges rejected claims that an expert was somehow not applying the new standard correctly, or characterized the argument as simply disagreeing with an expert's opinion as to what a person of ordinary skill would understand.  In yet others, the court invalidated claims indicating that even absent Nautilus the claims were likely indefinite under the old "insolubly ambiguous" standard.

Procedurally, it is not clear whether Nautilus means expert declarations are more necessary than in the past- but at least one case makes clear that if they are, the provisions in the local patent rules require that they be provided under the schedule set for in the local patent rules.

MCS1676; MCS5917; MCS165; MCS3219; MCS1718
 Commentary Michael C. Smith 2014-08-11T12:53:29-04:00 "Fifty Shades of iPad" - MCS seminar tomorrow http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/fifty-shades-of-ipad-mcs-seminar-tomorrow.html As a reminder, if anyone has paralegals in the area that need CLE, I will be conducting my purportedly lip-biting seminar on personal productivity, managing a law office, going paper-less and updating attendees on practice in local federal tomorrow tomorrow...
As a reminder, if anyone has paralegals in the area that need CLE, I will be conducting my purportedly lip-biting seminar on personal productivity, managing a law office, going paper-less and updating attendees on practice in local federal tomorrow tomorrow at the Summit Club in Longview.  The seminar brochure is attached. Download Fifty Shades of iPad seminar

Five solid hours of ... me.  What more could you ask for?
 Commentary Michael C. Smith 2014-08-08T17:49:15-04:00 Professionalism & Lack of Disputes Over Collateral Issues Weighs Against Fee Request Under 285 http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/professionalism-lack-of-disputes-over-collateral-issues-weighs-against-fee-request-under-285.html Stragent, LLC v. Intel Corporation, 6:11 CV 421 (8/6/14) Judge: Timothy B. Dyk Holding: Amended Motion for Attorneys' Fees denied Judge Dyk conducted a jury trial in this case earlier this year before a Tyler jury. The trial resulted in...
 Stragent, LLC v. Intel Corporation, 6:11 CV 421 (8/6/14)

Judge: Timothy B. Dyk

Holding: Amended Motion for Attorneys' Fees denied

Judge Dyk conducted a jury trial in this case earlier this year before a Tyler jury. The trial resulted in a jury verdict finding the asserted claims of the patent invalid and not infringed. Plaintiff did not file a post verdict motion for judgment as a matter of law and it did not appeal. Defendant Intel moved for an award of attorneys fees under 35 USC § 285, and filed an amended motion following the Supreme Court's decision in Octane Fitness.

Judge Dyk's opinion sets forth the history of the standards to be applied under section 285, explaining the significance of the Supreme Court's opinion in Octane Fitness. He then set forth a number of "general guidelines" that he discerned from the Supreme Court's decision.

Awards of attorneys fees in patent case should be reserved for rare and unusual circumstances.

Courts contemplating an award of attorneys fee should consider the totality of the circumstances in the case.

The mere fact that the losing party making losing argument is not a relevant consideration – the focus must be on arguments that were frivolous or made in bad faith.

The losing party's conduct need not be "independently sanctionable" to justify an award of fees.

The statute is directed to exceptional "cases" as a whole, as opposed to individual actions or arguments.

The relevant considerations for determination of whether a case is "exceptional" may include the conduct of the winning party – for example whether the winning party advanced arguments in bad-faith or committed litigation misconduct.

The standard of proof is a preponderance of the evidence, rather than clear and convincing evidence.

Judge Dyk characterized Intel's request for an award of fees as taking the "kitchen sink" approach that he concluded in discussing the "totality of the circumstances" factor was unwarranted, but in any event concluded that the case was not "exceptional" and therefore Intel's motion for an award of attorneys fee should be denied.

"Intel's motion is primarily based on the fact that Stragent made losing arguments," Judge Dyk explained.  "These were losing arguments," he continued, "but they were not frivolous." While agreeing with Intel that the Plaintiff's argument "was certainly a weak one" the Court noted that despite the alleged implausibility of the Plaintiff's position, the defendant never sought summary judgment of noninfringement on the basis of the limitation at issue, which suggested that the defendant did not always view Plaintiff's infringement positions as frivolous. "There is little injustice in forcing Intel to bear its own attorneys' fees for defending a claim that it did not challenge on summary judgment. Disposing of a frivolous claim on summary judgment would avoid a trial and have the effect of saving both parties a substantial portion of their litigation costs."

With respect to the disputes over the validity of the asserted claims, the Court noted that while in hindsight the Plaintiff's validity argument was not a winning position, the parties disputes on invalidity and related claim construction questions "were real and substantial" and noted that in fact the plaintiff prevailed in the majority of disputed claims constructions – "[i]t simply lost the jury verdict."

Intel also argued that the Plaintiff delayed in disclosing certain positions and in abandoning certain other positions which it contended constituted litigation misconduct. It also contended that the Plaintiff filed infringement suits against Intel's customers in an effort to force a settlement of the case, and engaged in bad-faith discovery. But the court noted that Intel never sought discovery sanctions against the Plaintiff, or even a court ruling limiting the scope of discovery. "As this Court remarked more than once, counsel for both sides were cooperative in reaching stipulations and minimizing disputes over collateral issues throughout the case. This not only save the Court's time, but surely lower the parties costs as well. Such professionalism is to be commended, and it weighs against a finding that an award of attorneys' fees is warranted."
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-08T12:48:07-04:00 Plaintiff's Motion for New Trial on Willfulness Denied http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/plaintiffs-motion-for-new-trial-on-willfulness-denied.html OPTi, Inc. v. Via Technologies, Inc., et al; 2:10-cv-279 (8/4/2014) Judge: Rodney Gilstrap Holding: Motion for New Trial on Willfulness denied Following trial before Judge Gilstrap's court, a Marshall jury returned a verdict that Defendant Via directly infringed the asserted...
OPTi, Inc. v. Via Technologies, Inc., et al; 2:10-cv-279 (8/4/2014)

Judge: Rodney Gilstrap

Holding: Motion for New Trial on Willfulness denied

Following trial before Judge Gilstrap's court, a Marshall jury returned a verdict that Defendant Via directly infringed the asserted patent, that it induced infringement, that the patent was not shown by clear and convincing evidence to be invalid or willfully infringed, and set damages at $2.1 million. At the conclusion of the trial, the Court held the bench trial of further evidence regarding the defendants' defenses of laches and equitable estoppel, and later entered an order denying these defenses as well as a final judgment.

The Plaintiff then filed a motion for new trial on the issue of willfulness, arguing that the jury's verdict was internally inconsistent because the jury's finding of induced infringement implied that the requisite state of mind for willfulness was present. Although the Defendant raised several arguments as to why this argument is incorrect, Judge Gilstrap observed that "the simplest is best" – the jury was asked to make its finding on induced infringement using a preponderance of the evidence standard of proof, while on the issue of willfulness the jury was required to apply a clear and convincing evidence standard.

The Plaintiff also argued that the evidence in the case established willful infringement, but Judge Gilstrap concluded that there was also ample evidence in the record to support a finding of no willfulness, specifically noting testimony by the Defendant's chief technology officer who performed extensive testing of a Via product. This testimony, the Court concluded, was more than sufficient to support a conclusion that the Defendant had both an objectively reasonable defense to the Plaintiff's charge of infringement and the actual good-faith belief in that defense.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-07T16:33:11-04:00 Renewed JMOLs Denied in Alexsam http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/renewed-jmols-denied-in-alexsam.html Alexsam v. Barnes & Noble, 2:13cv003 (5/12/14) Judge: Michael Schneider Holding: Renewed JMOL motions DENIED Given my enthusiasm for JMOL rulings, I am remiss in not posting on Judge Schneider's rulings on the JMOLs filed after last summer's Alexsam trials,...
Alexsam v. Barnes & Noble, 2:13cv003 (5/12/14)

Judge: Michael Schneider

Holding: Renewed JMOL motions DENIED

Given my enthusiasm for JMOL rulings, I am remiss in not posting on Judge Schneider's rulings on the JMOLs filed after last summer's Alexsam trials, conducted in the old state courthouse in Marshall.  I provided a fairly exhaustive recitation of the history and outcome of the litigation following the four trials and post-trial dismissals here, but overlooked the JMOL rulings in the two infringement trials when they came out this spring.

Judge Schneider denied the plaintiff's renewed JMOL, holding that it had not met the high buurden of setting aside the jury's verdict of noninfringement.  he found that the defendant had not confused the jury, as plaintiff alleged, and that there was sufficient evidence to support the jury's conclusion that the claims were not infrinnged.

Judge Schneider similarly denied the defendant's renewed JMOL of noninfringement as to claims that the plaintiff dropped shortly before trial, stating that it "cannot and will not enter judgment upon claims and defenses that were not presented for consideration to the jury" noting that "[t]he Court encourages and requires the parties to narrow their case for trial" and "will not penalize such attempts . . . by entering judgment on issues not presented at trial."
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-07T11:56:55-04:00 Motion for Attorneys Fees Following Voluntary Dismissal Denied http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/motion-for-attorneys-fees-following-voluntary-dismissal-denied.html SFA Systems, LLC v. 1-800-Flowers.com, Inc., et al; 6:09-cv-340 (July 8, 2014) Judge: Leonard Davis Motion for Attorneys' Fees Denied Plaintiff SFA, filed patent infringement claims against a number of defendants in 2011. In April 2013, it sought to voluntarily...

SFA Systems, LLC v. 1-800-Flowers.com, Inc., et al; 6:09-cv-340 (July 8, 2014)

Judge: Leonard Davis

Motion for Attorneys' Fees Denied

Plaintiff SFA, filed patent infringement claims against a number of defendants in 2011. In April 2013, it sought to voluntarily dismiss its claims against defendant Newegg. While Newegg did not object to dismissal of the suit with prejudice, it did oppose paying its own costs and fees. Judge Davis granted the plaintiff's motion in part, dismissing with prejudice all claims and counterclaims in the action but also granted Newegg leave to file a motion seeking its fees and costs. Accordingly Newegg sought over $1.2 million in attorneys' fees under 35 USC § 285, 28 USC § 1927 and the court's inherent powers, asserting that SFA engaged in vexatious litigation and brought objectively baseless claims against it in bad-faith. Although the motion was briefed prior to the Supreme Court's recent decision in Octane Fitness, which rejected the prior Federal Circuit legal test for determining whether a case is exceptional under section 285, the parties did not request leave for additional briefing and the court found none was required to decide the motion.

Judge Davis concluded that Newegg's primary complaint was that the plaintiff had filed many suits against many defendants, therefore engaging in a pattern of abusive and vexatious litigation to extract settlements, but found that the fact that SFA had filed several lawsuits against numerous defendants was insufficient to render the case exceptional. Even under the new, lower standard for an exceptional case designation, the Court found that Newegg had provided no evidence that the case "stands out from others with respect to the substantive strength of [SFA's] litigating position." It noted that Newegg's attempt to limit the scope of the patent to claim construction was rejected when the Court declined to adopt any of Newegg's propose constructions, and that Newegg's bare allegations that it would have prevailed on the merits were insufficient to render it an exceptional case. "For a case dismissed before trial to be designated exceptional, evidence of the frivolity of the claims must be reasonably clear without requiring a "mini trial" on the merits for attorneys' fees purposes", the Court wrote.

With respect to the claims under section 1927, the court noted that section 1927 is directed to the actions of the attorneys involved in the case, not the parties, and that Newegg failed to allege any specific actions by the plaintiff's counsel that would support sanctions under 1927. With respect to the request for sanctions under the court's inherent power, Judge Davis noted that the Federal Circuit had held that the case must be more than "exceptional" under section 285 to justify a sanction under the Court's inherent power.

 Eastern District of Texas - Tyler Division Michael C. Smith 2014-08-06T10:58:09-04:00 Summary Judgment Recommended on "Dynamic Replication" Claim in GeoTag Litigation http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/summary-judgment-recommended-on-dynamic-replication-claim-in-geotag-litigation.html GeoTag v. Domino's Pizza, 2:10cv572 (8/1/14) Judge: Roy Payne Holding: Sumary Judgment Recommended GRANTED on Claims of Infringement Under Doctrine of Equivalents On Friday I posted on a report & recommendation by Judge Payne's appetizer order for this case recommending...
 GeoTag v. Domino's Pizza, 2:10cv572 (8/1/14)

Judge: Roy Payne

Holding: Sumary Judgment Recommended GRANTED on Claims of Infringement Under Doctrine of Equivalents

On Friday I posted on a report & recommendation by Judge Payne's appetizer order for this case recommending granting summary judgment as to plaintiff GeoTag's claims of infringement under the doctrine of equivalents.  The case is set for pretrial conference before Judge Payne on August 18, and trial before Judge Schneider.

Today Judge Payne followed with the main course, recommending that defendant Domino's Pizza's motions for summary judgment based on lack of the famed "dynamic replication" and "geographic areas" limitations be granted.  (Ed. note: I represent Domino's Pizza in this case, along with Thomas W. Cunnigham, Frank Angilieri and John S. LeRoy with the Brooks & Kushman firm from Southfield, Michigan).

With respect to dynamic replication, the Court found that GeoTag "has not presented evidence establishing a genuine issue of material fact" on the relevant points and thus recommended granting the motion as to the three claims.  The Court also recommended granting the motion as to the geographic areas limitation.  There were two other limitations asserted - one was denied and one was granted.  The Court similarly recommended granting as to any claims against Domino's system prior to 2010, noting that although its expert claimed that source code review was not necessary and asserted that there was a fact issue that precluded summary judgment, GeoTag did not review source code prior to 2010, nor did it offer evidence to create a genuine dispute of material fact regarding the systems prior to 2010.

The Court also pointed out that GeoTag filed a multipage declaration by its noninfringement expert with its response, and that Domino's moved to strike the response as untimely expert opinion.  "While much of the substance of Mr. Easttom's declaration appears to be untimely opinion," the Court observed,  for purposes of this Motion only, the Court treats Mr. Easttom's declaration as proper."  Each of the finding in the opinion also noted that "For the purposes of this ruling," the Court assumed that the declaration is not improper opinion."
 Eastern District of Texas - Lufkin Division Michael C. Smith 2014-08-05T15:58:27-04:00 Summary Judgment Recommended as to Doctrine of Equivalents Claims http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/summary-judgment-recommended-as-to-doctrine-of-equivalents-claims.html GeoTag v. Starbucks, et al., 2:10cv572 (8/1/14) Judge: Roy Payne Holding: Sumary Judgment Recommended GRANTED on Claims of Infringement Under Doctrine of Equivalents Defendants argued that plaintiff GeoTag was barred from asserting infringement under the doctrine of equivalents for the...
GeoTag v. Starbucks, et al., 2:10cv572 (8/1/14)

Judge: Roy Payne

Holding: Sumary Judgment Recommended GRANTED on Claims of Infringement Under Doctrine of Equivalents

Defendants argued that plaintiff GeoTag was barred from asserting infringement under the doctrine of
equivalents for the "dynamic replication" claim limitations under two theories: 1) collateral
estoppel (also known as issue preclusion) and 2) prosecution history estoppel.  Finding that there was no support offered to rebut the presumption that all equivalents of the limitation were surrendered due to an amendment adding the limitation offered to overcome a rejection, the Court recommended that the motion be granted under the second ground.

 Eastern District of Texas - Marshall Division Michael C. Smith 2014-08-01T17:50:01-04:00 "Picking the Court: Jurisdiction, Venue, Removal and Remand in Federal Court" - MCS article in The Advocate http://mcsmith.blogs.com/eastern_district_of_texas/2014/08/picking-the-court-jurisdiction-venue-removal-and-remand-in-federal-court-mcs-article-in-the-advocate.html I returned from vacation this morning to find the latest issue of the State Bar Litigation Section's quarterly publication The Advocate in my in box. This summer's symposium issue is Litigating in Federal Court, with my article "Picking the Court:...
I returned from vacation this morning to find the latest issue of the State Bar Litigation Section's quarterly publication The Advocate in my in box.

This summer's symposium issue is Litigating in Federal Court, with my article "Picking the Court: Jurisdiction, Venue, Removal and Remand in Federal Court" leading off with a high level overview of the initial jousting over where the battle is to be fought.  So if you're a member of the Section, enjoy your paper copy.  There will eventually be an electronic copy available to Section members on our website (recently revamped) but it's not up just yet.

As is customary, the cover changes colors with each issue.  This one is appropriately color coded to match Wright & Miller's encyclopedic Federal Practice and Procedure.

 Papers Michael C. Smith 2014-08-01T11:57:57-04:00 Ongoing Royalty Set at Five Percent http://mcsmith.blogs.com/eastern_district_of_texas/2014/07/ongoing-royalty-set-at-five-percent.html Bianco MD v. Globus Medical Inc., 2:12-cv-00147 (7/1/2014) Judge: William C. Bryson Holding: Ongoing royalty set at 5% The jury in this case found that defendant Globus Medical, Inc. had misappropriated trade secrets belonging to the plaintiff. The jury rejected...
Bianco MD v. Globus Medical Inc., 2:12-cv-00147 (7/1/2014)

Judge: William C. Bryson

Holding:  Ongoing royalty set at 5%

    The jury in this case found that defendant Globus Medical, Inc. had misappropriated trade secrets belonging to the plaintiff. The jury rejected the plaintiff's request for disgorgement of Globus's profits on the devices that allegedly embodied the misappropriated trade secrets, but awarded him reasonable royalty damages in the amount of $4,295,760. That sum constituted 5% of the total "net sales" that Globus had earned prior to trial on the three products that were the subjects of the litigation.

    After the trial the Court denied Dr. Bianco's request for a permanent injunction but granted his request that the Court consider an ongoing royalty on the products in lieu of an injunction. The Court gave the parties 30 days within which to attempt to agree on an appropriate ongoing royalty rate, but they were unable to do so. The Court then held an evidentiary hearing on the issue of the ongoing royalty, and yesterday granted the plaintiff an ongoing royalty of 5% on Globus's future sales of its products for a maximum period of 15 years from July 1, 2007.

    The Court ordered further briefing on:

(1) whether the judgment should contain an award of prejudgment interest;

(2) if so, how prejudgment interest should be calculated and what the amount of the prejudgment interest award should be;

(3) the amount of taxable costs;

(4) how those costs should be allocated, given that neither party prevailed on all of the issues in this case; and

(5) the definition of "net sales" that the Court should incorporate in the ongoing royalties portion of the judgment.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-07-02T16:52:57-04:00 Marshall Status Conferences http://mcsmith.blogs.com/eastern_district_of_texas/2014/07/marshall-status-conferences.html It's status conference week in Marshall, with nonpatent cases up Monday afternoon, and patent cases yesterday afternoon. That means I spent this morning analyzing the settings to provide clients and cocounsel with information on time to trial and Markman, and...
It's status conference week in Marshall, with nonpatent cases up Monday afternoon, and patent cases yesterday afternoon.  That means I spent this morning analyzing the settings to provide clients and cocounsel with information on time to trial and Markman, and other information on that status of the docket, as well as information on changes in procedures and forms.

Maybe I'm the only one that gets a little thrill out of adding more data points to a chart ... but I definitely do enjoy that little extra length on the trend lines.  (I probably need a vacation).
 Eastern District of Texas news & events Michael C. Smith 2014-07-02T13:42:22-04:00 More Information on ED Texas Judicial Nominations http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/more-information-on-ed-texas-judicial-nominations.html Good article in Law360 about the new Eastern District of Texas judicial nominees Judge Amos Mazzant III of Sherman and Robert Schroeder III of Texarkana (calling him "Trey" at this point is only likely to lead to confusion for obvious...
Good article in Law360 about the new Eastern District of Texas judicial nominees Judge Amos Mazzant III of Sherman and Robert Schroeder III of Texarkana (calling him "Trey" at this point is only likely to lead to confusion for obvious reasons)  - see here.

I always like it when reporters cite me as a source for when the Apocalypse is near. Speaking of which, the reference to being "in the trenches" was actually a hat tip to the 100th anniversary of the start of World War I (last Saturday, June 28).  Glad it made it in.
 Eastern District of Texas news & events Michael C. Smith 2014-06-30T11:10:12-04:00 Two nominees announced for Eastern District benches http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/two-nominees-announced-for-eastern-district-benches-1.html This evening the White House announced nominees for the two vacant Eastern District of Texas judgeships. They are current magistrate judge Amos Mazzant of Sherman and Trey Schroeder of Texarkana. Both are long-time practitioners in the district, and well known... This evening the White House announced nominees for the two vacant Eastern District of Texas judgeships. They are current magistrate judge Amos Mazzant of Sherman and Trey Schroeder of Texarkana. Both are long-time practitioners in the district, and well known to local lawyers. One can even bake a damn fine batch of cookies. Congratulations to the nominees. We are so, so happy for both of you. Michael C. Smith 2014-06-26T23:05:57-04:00 Motion to Exclude Yet More Expert Testimony Granted - Lack of Apportionment Calculation Fatal to Reasonable Royalty Analysis http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/motion-to-exclude-yet-more-expert-testimony-granted-lack-of-apportionment-calculation-fatal-to-reaso.html ThinkOptics, Inc. v. Nintendo of America, Inc., et. al., 6:11cv455 (6/21/14) Judge: Leonard Davis Holding: Motion to Exclude Yet More Expert Testimony Granted I couple of days ago I posted on Judge Davis' opinion excluding the defendant's damages expert's opinions...
 ThinkOptics, Inc. v. Nintendo of America, Inc., et. al., 6:11cv455 (6/21/14)

Judge: Leonard Davis

Holding: Motion to Exclude Yet More Expert Testimony Granted

I couple of days ago I posted on Judge Davis' opinion excluding the defendant's damages expert's opinions in this case, with leave to revise and resubmit in accordance with the Court's order.  Judge Davis also excluded the plaintiff's damages expert in this case, again, with leave to revise and resubmit.  Although, as I note below, there is a substantive difference between the role of the two at trial.

The plaintiff's expert expressed an opinion that the reasonable royalty due was $5 per console and $3.25 per remote.  Defendant complained that the opinion improperly used the "entire market value" exception to the general rule that royalties are based on sales attributable to the infringing functionality only.  (Ed. note:  I was recently reading an admonition by Judge Rader in a CAFC oral argument to the effect that it's not a rule, it's an exception to the general rule, and that conceptually makes sense to me so I have rephrased the issue according to the way I understand it).

Plaintiff claimed was not (again, I have rephrased to how my eleven year old twins would understand this dispute, since they're the experts in our household on both Wii consoles and disputes), but that the requirements of the exception were met because the accused functionality drives demand for the accused Wii systems.  Judge Davis rejected this assertion.  Defendant next claimed that the plaintiff''s royalty figure was based on the entire market value of the accused products.  Plaintiff again claimed was not, relying on the Ericsson v. D-Link case.  Judge Davis disagreed, noting that the revenue base in that case was limited to "the market value of the contribution of the asserted patents to the end products"—not the market value of the end products as a whole.  He then focused on what the expert did differently here - he "considers total profits from accused and unaccused products [but] does not disclose how he apportions those end product profits. Thus, the Court is unable to determine whether Mr. Bokhart uses the entire market value of the accused Wii console as his royalty base."

"Because the expert's apportionment methodology, if any, is not disclosed" Judge Davis concluded, "his report is excluded."  (Emphasis mine).  The Court gave the Laserdynamics case another workout in this opinion, quoting it - as it did with respect to the defendant's expert - on the key point.  "'[A] reasonable royalty analysis . . . must carefully tie proof of damages to the claimed invention's footprint in the market place.' LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012)."

Interestingly, for those interested in the evidentiary rules, Judge Davis did not actually exclude the opinion for failure to comply with Federal Circuit substantive law on damages, which is usually the basis for exclusion in this area, as opposed to FRE 702.  Instead the exclusion was explicitly under Rule 702 itself, because the problem was actually not improper methodology, but unknown methodology.  In an elegant little piece of analysis under Rule 702, the Court noted that "[t]he lack of transparency in Mr. Bokhart's report precludes a finding that it "is based on sufficient facts or data; . . . is the product of reliable principles and methods; and . . . has reliably applied the principles and methods to the facts of the case." See FED. R. EVID. 702. The report should explicitly identify how the royalty base is apportioned to include only the value of the asserted patents." (Emphasis mine).  So it's not excluded because it violates LaserDynamics - at least not yet - but because it isn't shown to be based on sufficient facts and is the product of a reliable methodology.

Again, the expert was given leave to revise his report, be deposed, yada yada.

One more editorial comment.  As I wrote last summer in an article in an article in the "In House" supplement to Texas Lawyer focusing on IP, this procedure of trimming expert reports as the case approaches trial to conform them to Federal Circuit damages is not new, and of increasing importance in cases.  Last spring I was involved in a case where the trial judge issued four separate opinions ruling on challenges to a plaintiff's damages expert's report where it provided the necessary guidance as to what the expert could and could not do.  As you might expect, the final report was an order of magnitude less that the first one - and ended up being moot since the jury found the claims not infringed and invalid.  But at least the damages testimony was as consistent with the current guidance from the Federal Circuit as the Court could make it.

Of course, and this point is worth closing on - since the plaintiff bears the burden of proof on damages, this issue is of far more significance to it.  As the saying goes, with respect to breakfast, it's a day's work for a chicken, but a lifetime commitment for the pig.
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-06-26T10:59:43-04:00 To Amend or Not to Amend (Invalidity Contentions) - That Was The Question http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/to-amend-or-not-to-amend-invalidity-contentions-that-was-the-question.html One of the most common issues in practice under the local patent rules is determining when infringement and invaldiity contentions can be amended. Under the local rules, a party's contentions are deemed to be the party's final invalidity contentions unless...
One of the most common issues in practice under the local patent rules is determining when infringement and invaldiity contentions can be amended.  Under the local rules, a party's contentions are deemed to be the party's final invalidity contentions unless amendment or supplementation is permitted by the Local Patent Rules. P.R. 3–6. Aside from a window related to the Court's Markman ruling under which amendment of contentions is permitted as of right under P.R. 3–6(a), amendment may be made only by order of the Court "which shall be entered only upon a showing of good cause." P.R. 3–6(b).

When determining whether a party has demonstrated good cause, Eastern District of Texas courts typically consider factors set forth in S & W Enters., L.L.C. v. SouthTrust Bank of Alabama, NA, 315 F.3d 533, 536 (5th Cir.2003), those being: (1) the explanation for the party's failure to meet the deadline; (2) the importance of the amendment; (3) potential prejudice from allowing the amendment; and (4) the availability of a continuance to cure such prejudice.

I reviewed another data point on this issue today when Judge Gilstrap denied a group of defendants' motion to amend their invalidity contentions, seeking to add several new references.  While agreeing that the defendants had acted promptly in bringing the new references to the Court's attention, the Court noted that they had failed to explain why, with "reasonable diligence" they could not have discovered the references before the deadline.  It also rejected the defendants' argument that they "reserved the right" to amend the contentions, noting that such a unilateral reservation could not trump P.R. 3-6 or the Court's docket control order.  The Court also found that the defendants had failed to demonstrate the importance of the amendment, and that the plaintiff had shown prejudice as a result of the timing of the proposed amendment vis a vis the Markman hearing.

MS134
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-06-25T14:53:56-04:00 Look Away, Look Away, Look Away, Ipse Dixit - Another Noninfringement Summary Judgment http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/look-away-look-away-look-away-ipse-dixit-another-noninfringement-summary-judgment.html Just as I was finishing posting on Judge Bryson's order granting summary judgment of noninfringement, another ED Tex order crosses my desk granting the same thing. Specifically, the two defendants in a patent infringement case filed motions for partial summary...
Just as I was finishing posting on Judge Bryson's order granting summary judgment of noninfringement, another ED Tex order crosses my desk granting the same thing.  Specifically, the two defendants in a patent infringement case filed motions for partial summary judgment of noninfringement under the doctrine of equivalents, and one argued that it did not literally infringe at all.

With respect to the latter claim, the Court wrote that "Plaintiff's summary judgment evidence is [it's expert's] say-so ... But an expert's ipse dixit statements 'are not sufficient to avoid summary judgment.'"  As a result, the Court found that the expert''s unsupported opinion—contradicted by the very publication he relied on—did not generate a genuine issue of material fact.  Accordingly, summary judgment was granted as to the plaintiffs claims of literal infringement.  Sooo, looking away from the ipse dixit ruling (it was there - I had to use it) we'll move along to the DOE argument.

With respect to the plaintiff's claims under the doctrine of equivalents, the Court noted that prosecution history estoppel can bar the application of the doctrine of equivalents to recapture subject matter that was surrendered during prosecution, and that determination of whether this is the case is a matter of law for the Court. The Court then agreed that under the facts of the case, prosecution history estoppel applied, and that the plaintiff had not rebutted the presumption - thus summary judgment was rendered as to the DOE claims as well.

The Court concluded by ordering the plaintiff to submit a status report indicating its intent to prosecute its remaining claim of literal infringement and a certification that those claims are not frivolous under the Court's order.

MS149
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-06-24T16:12:47-04:00 "Fifty Shades of iPad" - NTAP seminar by MCS http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/fifty-shades-of-ipad-ntap-seminar-by-mcs.html I appear to be picking up speed this afternoon. Of course that happens when you're headed downhill. Attached is a brochure Download NTAP - Smith seminar for a seminar I will be doing for the Northeast Texas Association of Paralegals...
I appear to be picking up speed this afternoon.  Of course that happens when you're headed downhill.

Attached is a brochure Download NTAP - Smith seminar for a seminar I will be doing for the Northeast Texas Association of Paralegals (NTAP) on Saturday, August 9 at the Summit Club in Longview.  Billed as Fifty Shades of iPad it promises a "lip-biting seminar for lawyers, paralegals and office staff on personal productivity, managing a law office, going paper-less, and tips for practicing in local federal courts."  Ahem.

The seminar qualifies for 5.5 CLE hours towards continuing legal association credit, and I do not anticipate attendees will actually lose ethics credit by attending (although six consecutive hours of me is always fraught with risk of some sort or other - just ask my wife).  Half of the proceeds will be donated to charity, which is, after all, the least we could do.
 Commentary Michael C. Smith 2014-06-24T15:23:36-04:00 The Roses of Success: Renewed Motion for Summary Judgment Granted http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/the-roses-of-success-renewed-motion-for-summary-judgment-granted.html TQP Development, LLC v. Intuit Inc., Cause No. 2:12-cv-180 (06/20/2014) Judge: William Bryson Holding: Motion to Reconsider Denial of Motion for Summary Judgment of Non-infringement Granted If The Roses of Success from Chitty Chitty Bang Bang isn't the theme song...
 TQP Development, LLC v. Intuit Inc., Cause No. 2:12-cv-180 (06/20/2014)

Judge: William Bryson

Holding: Motion to Reconsider Denial of Motion for Summary Judgment of Non-infringement Granted

If The Roses of Success from Chitty Chitty Bang Bang isn't the theme song for motions for reconsideration, it ought to be.

After ascertaining that the parties' apparent agreement on a term was actually masking a disagreement that was likely to spring out at trial (of course this is the only time that has ever happened, right?)  Judge Bryson conducted additional claim construction proceedings.  He then considered the defendant's motion to reconsider his prior order denying its motion for summary judgment, and decided the defendant was correct that it was entitled to summary judgment since the plaintiff's only evidence on a key limitation was the conclusory assertion of its expert.

As Grandpa Potts put it in the middle verse (missing from my copy of the Court's opinion):

For every big mistake you make be grateful!
That mistake you'll never make again!
Every shiny dream that fades and dies,
Generates the steam for two more tries!
Ah, there's magic in the wake of a fiasco!
It gives you that chance to second guess!
Then up from the ashes grow the roses of success!

(Chitty trivia: Lionel Jeffries, who played Grandpa Potts (center above) in the 1968 musical, was actually 39 years of age during filming, three years younger than Dick Van Dyke, who played his on-screen son).

 Eastern District of Texas - Marshall Division Michael C. Smith 2014-06-24T15:01:58-04:00 New Chair for Texas Bar Journal Board of Editors - John G. Browning http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/new-chair-for-texas-bar-journal-board-of-editors-john-g-browning.html Regular readers know that I periodically note interesting articles in the Texas Bar Journal, in part because for the past four years I have served as chair of its editorial board. I will return to the editorial board this fall...
Regular readers know that I periodically note interesting articles in the Texas Bar Journal, in part because for the past four years I have served as chair of its editorial board.  I will return to the editorial board this fall for my tenth year, but this time as a member, as we will have a new chair, John G. Browning of Dallas.

John has served on the TBJ board for a number of years now, writing articles and emceeing numerous issues on a broad variety of topics (social media comes to mind, mostly because I have lifted a ton of his work for a couple of papers).  But the Bar Journal is just one very, very small corner of his writing career, as he is a published author and frequent contributor (including one this week to Texas Lawyer I noticed) for publications far too numerous to mention.  John recently received the 2014 Burton Award for Distinguished Achievement in Legal Writing for "Keep Your 'Friends' Close and Your Enemies Closer: Walking the Ethical Tightrope in the Use of Social Media," published in the St. Mary's Journal of Legal Malpractice & Ethics in 2013. The article was one of five law review pieces John published last year.  And it's his fourth Burton Award.

I have enjoyed working with John during his time on the board, and we have had some interesting experiences together, including getting to present to a class at SMU's Dedman School of Law School after one of our editorial board meetings - during which I discovered he was an adjunct professor there.  As well as another Dallas-area law school.  Makes me tired just typing it.

I wish John the best of luck in his new role, and know he'll not just continue but greatly improve on the good work the Bar Journal has been doing.  Kudos to incoming SBOT president Trey Apffel for picking him - he's a definite upgrade at the position!

 Commentary Michael C. Smith 2014-06-24T14:14:35-04:00 Motion to Exclude Damages Expert Testimony Granted With Leave to Amend http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/motion-to-exclude-damages-expert-testimony-granted-with-leave-to-amend.html ThinkOptics, Inc. v. Nintendo of America, Inc., et. al., 6:11cv455 (6/21/14) Judge: Leonard Davis Holding: Motion to Exclude Expert Testimony Granted Plaintiff sought to exclude the defendant's damages expert's opinions, claiming that the expert's royalty base did not include the...
 ThinkOptics, Inc. v. Nintendo of America, Inc., et. al., 6:11cv455 (6/21/14)

Judge: Leonard Davis

Holding: Motion to Exclude Expert Testimony Granted

Plaintiff sought to exclude the defendant's damages expert's opinions, claiming that the expert's royalty base did not include the value of every claimed element. Judge Davis agreed, holding that while it is sometimes necessary to apportion the smallest salable practicing unit to remove the value of unclaimed elements, here the defendant had not cited any precedent permitting the complete removal of the value of claimed elements.

The Court permitted the defendant to amend its expert's report and recalculate his reasonable royalty in light of the Court's ruling within six days, after which the expert could be deposed, and the plaintiff could file a supplemental expert report to respond to any amended report by the defendants expert, with the plaintiff's damages expert then subject to an additional deposition as well.
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-06-24T12:29:12-04:00 Trends in Patent Litigation - guest post by R. David Donoghue http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/trends-in-patent-litigation-guest-post-by-r-david-donoghue.html R. David Donoghue is a patent trial attorney and partner with Holland & Knight's Intellectual Property Group in Chicago. He maintains both the Chicago IP Litigation Blog and the Retail Patent Litigation blog, which was was created to help retailers...
 R. David Donoghue is a patent trial attorney and partner with Holland & Knight's Intellectual Property Group in Chicago. He maintains both the Chicago IP Litigation Blog and the Retail Patent Litigation blog, which was was created to help retailers understand patent litigation and how to drive their cases to positive resolution.

Professors John Allison (University of Texas at Austin McCombs business school), Mark Lemley (Stanford), and David Schwartz (Chicago-Kent) have published an interesting article looking at empirical patent litigation data for cases filed in 2008 or 2009 as compared to similar data for cases filed in 1998-99 — Understanding the Realities of Modern Patent Litigation.  It is not a perfect data set because, as the article notes, it does not include the most recent cases, those filed in or after 2010.  But it does track decisions in the 2008-09 cases through 2013 which makes the data set more recent than it could be.  And regardless of whether it includes the most recent data, it is valuable for retailers to show macro trends in patent litigation.  Here are some highlights and related takeaways for retailers:

Anticipation is King.  In 1998-99, decided invalidity challenges (won or lost) were "overwhelmingly" based upon obviousness, to the point that although obviousness had a very low win rate, the largest number of invalidations were still based upon obviousness.  For the 2008-09 data set, there were as many anticipation challenges as obviousness challenges (154 v. 149).  This suggests that defendants have become more sophisticated and more cost conscious.  Knowing that obviousness challenges have a low win rate, defendants are focusing their prior art challenges on anticipation.  And anticipation challenges are likely to continue rising as obviousness challenges drop based upon: 1) the low win rate for obviousness; and 2) the fact that the PTAB is a far better trier of fact for obviousness arguments.  The Patent Office is accustomed to complex, multi-reference obviousness challenges and is willing to invalidate based upon obviousness, making the PTAB the faster, cheaper and most successful route for obviousness challenges.

The King is Dead.  Long Live the King.  Indefiniteness challenges, virtually non-existent in the 1998-99 data set, have overtaken anticipation and obviousness challenges with 176 motions.  And that is before the Nautilus, Inc. v. Biosig Instr., Inc., No. 13-369, __ S.Ct. __ (2014), decision replacing the "insolubly ambiguous" standard with the arguably higher standard that the patent must inform one of ordinary skill as to the scope of the term with reasonable certainty.  There is some dispute about whether the standard will result in increased indefiniteness, but whether or not it does it should at least generate more indefiniteness defenses and summary judgment motions while the district courts and eventually the Federal Circuit flesh out what the "reasonable certainty" standard means.

Invalidity SJ is a Long Shot.  Or at least, the motions have low success rates.  20% success for anticipation motions, 20% for obviousness, and 17% for indefiniteness.  The clear winner was 54% for Section 101 patentable subject matter motions.  One of the reasons for the low success rates is likely over-filing of invalidity motions.  I suspect defendants who file invalidity motions sparingly only when there really is no question of fact in a necessarily fact-intensive analysis have a much higher win percentage.  As patentable subject matter motions become more widespread (as they already are), we will likely see a large increase in the number of motions and some drop off in the win rate.

Invalidity Is Also a Long Shot at Trial.  Invalidity win rates at trial do improve, but not drastically:  31% for anticipation; 28% for obviousness; 17% for indefiniteness.  This is not surprising because the patentee enjoys the presumption of validity and jurors tend to see the Patent Office as beyond reproach, which collectively requires a very strong invalidity case and presentation to overcome.  These statistics are another indication that retailers should strongly consider Patent Office proceedings to challenge patent validity.

Patentees Lose Most of the Time.  While invalidity decisions have relatively low success rates (at least for now), patentees only win 26% of rulings on the merits.  This is because defendants win 54% of noninfringement motions, and if you include noninfringement stipulations after claim construction, the percentage raises to 57%.  And of course, the patentee has to win every issue to succeed.  So, the noninfringement and invalidity rulings are largely additive, with some limited overlap when a court decides motions together on multiple issues.

Forum Matters.  The article analyzed win rates which suggest that, patentees fair best in E.D. Texas and D. Delaware (the two biggest patent districts), as well as S.D. New York.  Conversely, patent defendants are most successful in C.D. California, N.D. California and N.D. Illinois.
 Commentary Michael C. Smith 2014-06-24T11:06:59-04:00 Motions to Stay Pending Resolution of Standing Issues Granted and Affirmed http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/motions-to-stay-pending-resolution-of-standing-issues-granted-and-affirmed.html RMail Limited v. Amazon.com, Inc., et al; Cause No. 2:10-cv-258 (04/04/2014) Judge: Rodney Gilstrap Holding: Motion to Stay Granted; Reconsideration Denied In this interesting case, Judge Gilstrap granted a Motion to Stay and administratively closed the case pending a determination...
RMail Limited v. Amazon.com, Inc., et al; Cause No. 2:10-cv-258 (04/04/2014)

Judge: Rodney Gilstrap

Holding: Motion to Stay Granted; Reconsideration Denied

In this interesting case, Judge Gilstrap granted a Motion to Stay and administratively closed the case pending a determination of ownership as to the asserted patents in California state and bankruptcy court, a fact that surfaced on the eve of trial.  While rejecting the defendants Motion to Dismiss for Lack of Subject Matter Jurisdiction, the Court granted the Defendants' alternative request for a stay pending resolution of the California actions.

The plaintiff subsequently sought reconsideration of the Court's determination to stay the case, but the Court found that the arguments presented could have been raised in opposition to the original motion, and declined to proceed with respect to only one group of patents, as that would require the court to conduct two trials.
 Eastern District of Texas - Marshall Division Michael C. Smith 2014-06-23T16:48:47-04:00 Supreme Court Approves Amendments to Hearsay Rules http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/supreme-court-approves-amendments-to-hearsay-rules.html For those interested in such things, the Supreme Court has approved amendments to the Federal Rules of Evidence that deal with hearsay: 801(d)(1)(B) (prior consistent statements), and 803(6), (7), and (8) (burden of proof in showing untrustworthiness of records of...
For those interested in such things, the Supreme Court has approved amendments to the Federal Rules of Evidence that deal with hearsay: 801(d)(1)(B) (prior consistent statements), and 803(6), (7), and (8) (burden of proof in showing untrustworthiness of records of regularly conducted activities and public records).  The amendments will take effect on December 1, 2014 unless Congress takes other action.

801(d)(1)(B)

The first amendment adds as a ground for admissibility of prior consistent statements "to rehabilitate the declarant's credibility as a witness when attacked on another ground ..."  I've only seen the existing language used once in 22 years ( I used the state court equivalent once in a trial in state district court in Dallas in 1999) reflecting that this is pretty rare air in practice.   However, the amendment's expansion of the rule to general attacks on credibility will allow impeachment of a witness to permit admission of a prior consistent statement that is not raised as result of the cross examination, but rather to bolster the witness against, for example cross examination that pointed out that the witness had a bad memory or that the witness had a reputation for dishonesty. So this will be one more thing to worry about when crafting a cross examination, and one more opportunity to get in useful information to support a witness under attack.

803(6), (7), and (8)

Generally speaking, these are the business and public records exceptions to the hearsay rule.  This rather narrow group of amendments makes it clear that it is the opponent that bears the burden of proof to show a lack of trustworthiness when seeking to prevent the admission of the records.  In other words, it is the proponent of the records' burden to  lay the predicate for admissibility of the records, but it is the opponent's burden to show that despite the predicate having been laid, the record should still be excluded as untrustworthy.

What do you want to bet that even after this amendment we still hear lawyers seeking exclusion arguing that the proponent has not shown that the information is trustworthy?
 Commentary Michael C. Smith 2014-06-23T15:53:30-04:00 Tyler Jury Finds Infringement http://mcsmith.blogs.com/eastern_district_of_texas/2014/06/tyler-jury-finds-infringement.html As I posted back in April, a Tyler jury in Judge Michael Schneider's court held that the defendant had not shown by clear and convincing evidence that the 14 asserted claims in U.S. Ethernet Innovations, LLC v. Texas Instruments Incorporated,...
As I posted back in April, a Tyler jury in Judge Michael Schneider's court held that the defendant had not shown by clear and convincing evidence that the 14 asserted claims in U.S. Ethernet Innovations, LLC v. Texas Instruments Incorporated, 6:11cv491, were invalid either as anticipated or as obvious. The trial was limited to invalidity, and a later trial was set as to infringement.

Last week, another Tyler jury found three different TI products had infringed the asserted claims directly and that TI had also induced infringement.  USEI had asked the jury for $4.3-6.5 million in damages, and the jury assessed $3 million.  While the case originally involved three patents and additional defendants, by time of trial only TI and one patent was left.  For this infringement-only trial each side had eight hours for evidence.
 Eastern District of Texas - Tyler Division Michael C. Smith 2014-06-23T10:12:41-04:00