TIMING IS EVERYTHING: NEW PROCEDURES TO FILING A MOTION TO DISMISS UNDER 35 U.S.C. §101

There has been a lot of discussion on when to file a motion to dismiss under section 101. To help in this decision, Judges Gilstrap and Payne have instituted a new procedure for filing a motion to dismiss under 35 U.S.C. §101. The new procedure requires that a party seeking to file a dispositive motion under section 101 before the Court’s Claim Construction Order has issued may do so only upon grant of leave from the Court after a showing of good cause. The Court also requires the standard letter briefing process to be followed in seeking leave to file the motion. If, however, the Court’s Claim Construction Order has issued, a party has two weeks from issuance of the Claim Construction Order to file its dispositive motion under section 101 without leave of court and without use of the letter briefing process.

And on the heels of this new procedure being instituted, a Judge Payne issued an opinion indicating that consideration of a section 101 motion pre-Claim Construction will be the exception rather than the norm. In the opinion, Judge Payne states:

“While handling the issue of §101 eligibility at the pleading stage is permissible, those issues are often inextricably tied to claim construction. Thus, it seems a definitive ruling on eligibility before claim construction is only warranted in narrow circumstances, making such a ruling the exception rather than the rule.”

This new procedure and ruling provides some guidance to counsel on when and how to file a section 101 motion to dismiss.

JUDGE SCHNEIDER TRANSFERS PATENT CASES TO NEW DISTRICT JUDGE SCHROEDER AND JUDGE GILSTRAP

For those interested in the recent intra-district case transfers, and as a follow up to our post of January 24th, the E.D. Tex. patent case load continues to settle out in light of former Chief Judge Leonard Davis’ upcoming retirement and the recent appointment of Judge Robert Schroeder.

On Friday, January 29th, Judge Schneider issued an Order Transferring Tyler Patent Cases1.  This move was in the context of General Order Assigning Civil and Criminal Actions (GO 14-20), and a total of 77 cases were reassigned.  Judge Schroeder received 60 cases, and Judge Gilstrap received the other 17.

All of Judge Gilstrap’s 17 new cases were filed by two plaintiffs, Adaptix, Inc. and Blue Calypso, Inc.  Regarding the Adaptix cases, two have recently settled and final judgment has already been entered, a group of three have been consolidated by agreement for all purposes including trial, and four were transferred last month to N.D. Cal.  The Blue Calypso matters are currently caught up in briefing related to an attempt to lift a stay previously granted due to a covered business method patent review.

As to Judge Schroeder’s 60 new cases, three were previously consolidated for all pretrial purposes except venue, five cases represent the consolidation of the remainder of the Blue Spike cases (there were 101 originally filed), one case was transferred last month to the D. Conn., another two were previously consolidated for all pretrial purposes, seven cases (all filed by EMG Technology, LLC) have been consolidated for all pretrial purposes, 10 cases (filed by Uniloc USA, Inc.) have been consolidated for all pretrial purposes, two cases were dismissed with prejudice last month, and finally, although not consolidated as of this posting, 16 of these cases were all filed on December 12, 2014 by Secured Structures, LLC, all with the same patent-in-suit.

With Judge Schroeder’s caseload beginning to be established, of note also is his 1/28/2015 Referral Order RS-72-1.  This Order lays out the percentages and procedures for referral of his cases to the District’s magistrate judges for pretrial proceedings.

1Pacer log-in required

MUM’S THE WORD

Eastern District of Texas Chief Judge Ron Clark has entered an Order1 in Lunareye v. Gordon Howard Associates (CA No. 9:13-cv-91) addressing issues that the Court referred to as “novel, and likely to recur”. At dispute was the disclosure to the Patent Trial and Appeal Board (PTAB) of information protected by a Protective Order entered by the District Court. Judge Clark found that Plaintiff disclosed protected information and imposed sanctions as a reminder to counsel and to deter future violations. While the Defendant claimed three topics of protected information was improperly disclosed, the Court found that only one topic – Defendant’s litigation budget in relation to its profits – was protected and should not have been discussed with the PTAB without first availing themselves of procedures to avoid inadvertent disclosure of protected confidential information such as a motion to seal under 37 C.F.R. § 42.14 or request that the protective order be modified. The Court mentioned that this case highlights what is likely to be a recurring issue as more cases are brought before the PTAB for inter partes review. The Court pointed out the dearth of case law on the interaction between a district court’s protective order and proceedings before a PTAB panel.

This Order is a reminder to all that the Court considers Protective Order issues as serious and parties should be diligent in determining whether any information it intends to disclose – even to another Court or agency – is covered as protected information and if so, whether additional appropriate action should be taken to protect such information.

1Pacer account may be required to access hyperlinks

Whateva!

Eastern District of Texas Judge, Rodney Gilstrap, issued an Order1 today clarifying, and reminding counsel, that the recent SCOTUS decision in Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc. et al. 574 U. S. ____ (2015) hasn’t altered his standard courtroom procedure for Markman hearings.

Teva, as you probably know, is the recent SCOTUS opinion (7-2, with Thomas and Alito dissenting) authored by Justice Stephen Breyer that attempted to clarify the standard of review applied to Markman hearings. Apparently, we all should have known that Markman rulings are reviewed by the Federal Circuit de novo…except when they aren’t.

Confused? Pull up a chair. Justice Breyer, in Teva, explained that the legal portion of a Markman ruling was indeed supposed to be reviewed on a de novo basis, but that to the extent such rulings were based on underlying factual issues, the District Court’s findings on factual issues are to be reviewed pursuant to the clearly erroneous standard. Thus, SCOTUS, reversed and remanded the Fed. Circuit, because they had rejected an expert’s opinion (Teva’s expert) that the lower court had accepted in formulating its Markman ruling. Hey, don’t look at me, I didn’t write the thing, but since this is a blog entry and not a dissertation click the link above and read the opinion for yourself.

Meanwhile in Judge Gilstrap’s court…

The plaintiff, in ContentGuard Holdings, Inc. v. Amazon.com Inc. et al, 2:13-cv-01112-JRG, announced its intention to present live testimony from their expert at the Markman hearing. This of course was met with consternation from the defendants, and a great deal of “Yes we can!” and “No, you can’t!” ensued. This back and forth culminated in defendants filing an emergency motion to prohibit such live testimony based on the alleged failure of plaintiff to provide adequate notice, and plaintiff submitting a letter to the Judge Gilstrap presenting notice, in light of Teva, that they intended to present live expert testimony at the Markman hearing in a week’s time.

Judge Gilstrap responded rather promptly in “not so fast” fashion with the aforementioned Order. While recognizing that this was the first claim construction hearing in which a party had addressed the Teva decision, Gilstrap took the opportunity to point out that he had a long standing procedure for providing evidentiary support at a Markman hearing, and that was through sworn declarations attached to briefs, NOT through live testimony. Further, Teva, Judge Gilstrap opined, did not require anything different, and formalized his longstanding custom and procedure with an ORDER (that’s right, he put in all caps) that henceforth “without a prior order granting leave to call witnesses (in person or by deposition) such live testimony will not be permitted at claim construction hearings before this Court.” Accordingly, he said thanks, but no thanks, to plaintiff’s letter and denied defendants’ emergency motion as moot.

1Pacer account may be required to access hyperlinks

New Eastern District of Texas Chief Judge Ron Clark Transfers Pending Patent Cases to Local Judges

As many throughout the legal community are aware, the U.S. Senate confirmed Judge Amos Mazzant and Texarkana attorney Robert “Trey” Schroeder III as the two new E.D. Tex. Article III judges on December 16, 2014. Judge Mazzant will sit in Sherman, and Judge Schroeder will sit in Texarkana. Three days later, then Chief Judge Leonard Davis issued GENERAL ORDER 14-20, outlining the assignment by percentage of all the District’s new cases to the various judges.

Pursuant to Judge Davis’ pending retirement in May of 2015, new Chief Judge Ron Clark issued MISC. ORDER 15-1 last Wednesday, January 14th. In accordance with Judge Davis’ General Order, Chief Judge Clark transferred numerous cases, both patent and non-patent, that were previously pending before Judge Davis. Below is a breakdown of the patent case transfers, along with some perspective of the numbers in light of the Leahy-Smith American Invents Act (“AIA”) and other factors:

• Judge Gilstrap – received a total of 9 cases (Under the AIA, 2 of these cases have been consolidated for pre-trial purposes; another 2 are related cases with motions to lift stay currently pending);

• Judge Schroeder – received a total of 56 cases (Plaintiff Uniloc filed 39 of these cases, and all have all been consolidated for pre-trial under the AIA into three lead cases, with groups of 31, 6, and 2 cases respectively; also, of the 56 transferred cases, an additional 6 involving three different plaintiffs were also consolidated into three groups of 2 cases each).

With Judge Gilstrap now having been on bench since December of 2011 and managing the largest patent docket in the country, E.D. Tex. practitioners begin the process of learning the nuances of Judge Schroeder’s case management procedures and preferences. Findlay Craft is honored to represent several clients involved in cases presently before both Courts.

Stay tuned for news of additional transfers, presumably in the near future.

FC named as “Go-To” Firm by Fortune 500 Companies in 2014

Findlay Craft P.C. has been recognized as a 2014 “Go-To” Law Firm in American Lawyer Media’s 11th annual edition of In-House Law Departments at the Top 500 Companies.  With this honor, Findlay Craft helps comprise an elite group that delivers exceptional work for the In-house legal departments at Fortune 500 companies.

Annually, general counsel and other company leaders are polled by American Lawyer Media on which law firms they turn to for outside counsel in a number of practice areas.  Findlay Craft has been chosen by a number of its Fortune 500 clients as a law firm they routinely rely on for legal advice in the areas of intellectual property and patent litigation.  Those companies include CDW Corporation, Cisco Systems, eBay, Motorola Mobility Holdings, and Motorola Solutions.

For other acknowledgements we are proud of click here.

Patent Litigation Year in Review – Eastern District of Texas

Since the America Invents Act was implemented in 2011, there has been a steady increase in the number of patent cases filed due to the fact that “accused infringers may not be joined in one action as defendants or counterclaim defendants.” This means that their actions may not be consolidated for trial based on multiple parties infringing upon the same patent-in-suit. Therefore, plaintiffs are involved in multiple cases with various defendants over the same patent. The First Annual Patent Litigation Year of Review published by Lex Machina showed the growth in the number of patent suits filed in the District Court system.  So what does this mean for the Eastern District of Texas?  Out of the 6,092 patent cases filed, 1,495 of the cases were filed in the Eastern District of Texas, or 25% of all patent cases. The Eastern District of Texas has always been considered the “rocket docket,” however the docket is not quite as fast these days. It is not unusual for a case to take 2 years or more to reach trial. The Eastern District of Texas saw a total of 25 trials, 11 bench trials and 22 jury trials in 2013; where 8 of these trials were both bench and jury trials. Out of the 1,495 new cases filed in the Eastern District of Texas, 1,130 of those were in the courts of Judge Gilstrap, Judge Davis, and Judge Schneider. Judge Gilstrap was assigned 941 new cases, where all other judges saw no more than 400 patent cases across all districts. Large technology companies experienced the majority of the suits filed. The charm that East Texas courts’ possess still holds true; especially to the patent-holders. Although defendants are unlikely to win a summary judgment case, they certainly still win cases. For 2013 in the Eastern District of Texas, defendants won 13 cases and plaintiffs won 5 cases. As the district continues to stay on top and with the judicial vacancies in both Sherman and Texarkana in the process of being filled, Findlay Craft looks forward to the future of the Eastern District of Texas.

Read the full review here.

Findlay Craft Opens New Headquarters

Findlay Craft is proud to announce the opening of its new headquarters in the People’s Petroleum Building on the square in historic Downtown Tyler, Texas.

Findlay Craft was founded and based at its previous location on Old Jacksonville five years ago. However, to offer their clients even more in the way of convenient access to the courthouses, and to be part of the ever-expanding revitalization of one of the state’s most historic downtowns, Findlay Craft has decided to make a change. As the firm has continued to develop and grow, founding partners Eric Findlay and Brian Craft have seized the opportunity to expand the practice into this significant and beautiful new space.

“We’re thrilled to be taking an active role in the renovation and renewal of one of the most iconic structures in East Texas,” said Findlay. “Additionally, we are excited for the future of Findlay Craft, and the advantages and benefits our new location downtown will bring to our clients.”

The People’s Petroleum Building is the most prominent, historic landmark in Downtown Tyler. Built in 1932 by one of Tyler’s most influential businessmen, Samuel A. Lindsey, the 15-story building is located at the west end of the downtown square. At the time it was built, it was the tallest high-rise building in East Texas and one of the largest construction projects west of the Mississippi.

Originally named for its first anchor tenant, the People’s National Bank, this Art Deco showplace was designed to meet the growing financial and business needs created by the East Texas oil boom. Many prominent businessmen officed there – including H.L. Hunt, D.K. Caldwell, Sam R. Greer and A.W. “Dub” Riter Jr. For decades it was truly the area’s most prestigious business address.

Now, the People’s Petroleum Building is returning to prominence through both a comprehensive overhaul and reconstruction of its beautiful, original style and through the addition of new residents like Findlay Craft – business leaders who see the value in preserving the history and tradition of East Texas, while looking forward to the future. This move is than just a relocation for Findlay Craft, it’s a chance to step up, and forward, in the community and for their clients.

Yetter Coleman & Findlay Craft Successfully Represent Companies In Patent Assertion

In November 2013, Yetter Coleman and Findlay Craft LLP successfully represented L.C. Eldridge Sales Co. and Leseman Davis LLC in asserting their U.S. Patent 7,707,828 against Singapore-based Jurong Shipyard and Atwood Oceanics and Seadrill entities operating drilling rigs in the Gulf of Mexico.

For more information, see Yetter Coleman’s website.

Yetter Coleman Wins Jury Verdict in E.D. Tex. Patent Trial for Offshore Drilling Rig Equipment Supplier, Securing Findings of Willful Infringement and Full Damages

November 2013

Yetter Coleman has successfully represented L.C. Eldridge Sales Co. and Leseman Davis LLC in asserting their U.S. Patent 7,707,828 against Singapore-based Jurong Shipyard and Atwood Oceanics and Seadrill entities operating drilling rigs in the United States Gulf of Mexico. The case, L.C. Eldridge Sales Co. v. Jurong Shipyard, Pte., et al., was heard before the Hon. Michael Schneider of the U.S. District Court for the Eastern District of Texas, Tyler Division. The jury found every asserted claim infringed and not invalid. In addition, the jury found the defendants had willfully infringed Eldridge’s patent and awarded the full amount of lost-profit damages Eldridge sought.

Eldridge invented a system that solves a longstanding problem on offshore drilling rigs caused by toxic exhaust fumes from the large diesel engines used to power the rigs. When Jurong Shipyard’s customers sought to have the Eldridge system installed on new rigs, Jurong gave Eldridge’s proprietary design drawings to a Singapore-based ventilation company and told it to build a similar system. Eldridge was diligent about notifying everyone in the industry about the ‘828 patent once it issued, including Jurong and its two drilling company customers, Seadrill, and Atwood.

At trial, Yetter Coleman explained to the jury how Eldridge invented the exhaust system, repeatedly told the industry about its invention, and showed how the Defendants ignored Eldridge’s patent rights. In less than two hours, the jury returned a unanimous verdict of infringement, committed willfully, by each of the defendants, and Eldridge’s lost profits, rejecting the defense invalidity arguments of anticipation and obviousness.

Paul Yetter and Eric Chenoweth led the trial team that also included Tom Morrow and Chris Johnson, along with co-counsel, Findlay Craft LLP.

Tyler Jury Shoots Down Plaintiff in Telecom Patent Case

© 2013 The Texas Lawbook.

By Jeff Bounds
Staff Writer for The Texas Lawbook

(July 16) – A group of four foreign makers of telecom gear scored a defense win Monday in a patent suit filed by a Canadian technology and licensing firm.

A federal jury in Tyler awarded no damages to Ottawa, Canada-based Wi-LAN Inc. after a nearly three-year court tussle with equipment vendors Alcatel-Lucent USA Inc. and Ericsson Inc. and handset makers HTC Corp. and Sony Corp.’s Sony Mobile Communications.

The panel also found that various claims in three of the four patents that WiLAN asserted were invalid, according to a statement from the company and the jury verdict form. The four patents all related to methods for processing data sent via wireless networks.

“WiLAN is disappointed with the jury’s decision and is currently reviewing its options with trial counsel, Vinson & Elkins LLP,” the company said in a statement.

Ward & Smith Law Firm also is representing WiLAN.

The law firms representing HTC included Sheppard, Mullin, Richter & Hampton and Findlay Craft. Alcatel-Lucent’s law firms were Kirkland & Ellis LLP and Potter Minton PC. Thompson & Knight LLP and Holland & Knight LLP were among the firms representing Ericsson and Sony Mobile.

Ericsson, which is based in Sweden and has its U.S. base in Plano, said in a separate statement that it was “very pleased” with the jury’s findings. “This is a great win for Ericsson and for the industry,” the statement said.

An Alcatel-Lucent spokesman said the verdict “validates our belief that WiLAN was stretching the boundaries of its patents.”