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In the ongoing patent infringement case between Acceleration Bay LLC and Activision Blizzard Inc., the district court recently issued an order resolving several important evidentiary disputes between the parties. This order provides guidance on the admissibility of various categories of evidence that will impact the damages case at the upcoming trial.

Here are the key takeaways:

Survey Evidence Allowed for Limited Purpose

The court permitted Acceleration Bay to use Activision’s own customer surveys for the limited purpose of showing that the allegedly infringing large multiplayer game modes in Call of Duty are of equal or greater importance to customers compared to the non-infringing small game modes. Nonetheless, the district court reiterated its exclusion of the plaintiff’s damages expert’s opinions apportioning royalties based primarily on this survey evidence, finding that while the surveys can demonstrate the significance of the accused modes, they cannot directly calculate the royalty damage amount.

Evidence of Foreign World of Warcraft Sales Permitted

The district court allowed Acceleration Bay to present evidence of Activision’s foreign sales revenues for the World of Warcraft game. The plaintiff’s theory is that the infringing U.S.-based server system supports foreign players in North and South America. The district court found that as long as Acceleration Bay provides evidence linking the foreign sales to the accused domestic server system, the foreign revenue numbers can be admitted, even if conditionally at first. Continue reading

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In a recent development in patent litigation, the district court has granted a motion to dismiss counterclaims in a case involving U.S. Patent No. 10,519,668 (“the ‘668 Patent”). The decision sheds light on the importance of adhering to meet and confer obligations, as well as the consequences of non-compliance.

Background:

The defendants in this case had asserted counterclaims, including declaratory judgments of invalidity and non-infringement of the ‘668 Patent, breach of contract, fraud, unjust enrichment, and constructive trust.  On October 31, 2023, the district court granted the defendants’ Motion for Summary Judgment of non-infringement of the ‘668 Patent, marking a significant milestone change in the proceedings.

Subsequent Events:

Following the district court’s decision, the defendants’ counsel sought to engage in a meet and confer with the plaintiff, Upstream, regarding the possible dismissal of the counterclaims without prejudice. Despite making multiple attempts to contact Upstream’s counsel between March 19 and 27th, no response was received. Consequently, the defendants proceeded to file a motion to dismiss their counterclaims on March 29, 2024. Continue reading

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In the ongoing case of Inmar Brand Solutions, Inc. v. Quotient Technology Inc., the district court was tasked with conducting an analysis under the Supreme Court’s two-step test in Alice Corp. v. CLS Bank International to determine whether Inmar’s patented coupon-processing system, exclusively licensed from Intelligent Clearing Network, Inc. (ICN), was entitled to patent protection. Under the Alice framework, the district court must first ascertain whether claims are directed towards patent-ineligible subject matter, such as abstract ideas. If so, the district court proceeds to the second step, wherein it evaluates whether the claims contain an inventive concept that transforms the abstract idea into a patent-eligible application.

Quotient contends that the patents asserted by Inmar are invalid and directed towards a patent-ineligible abstract idea: namely the processing of coupons on a remote server. According to Quotient, the claims lack an inventive concept and merely recite generic computer components.

Inmar opposes this characterization, and contends that the claims represent an improved coupon processing architecture that significantly reduces fraud and cannot be accomplished by humans.

As explained by the district court, the primary concern underlying this argument is the concept of preemption, which aims to prevent the granting of a monopoly over an abstract idea that could impede innovation. While the Supreme Court in Alice did not provide precise contours for what constitutes an abstract idea, subsequent Federal Circuit decisions have shed light on this issue. Continue reading

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The crux of this case revolves around a dispute over patent infringement, trade secret misappropriation, and unfair competition filed by Nielsen (or Plaintiff) against Hyphametrics (or Defendant). At the heart of the issue in this motion were specific documents – experimental reports. These reports were initially produced by Hyphametrics to Nielsen but were later retracted under the assertion of work product protection.

The Memorandum Order issued by the court dissected the arguments presented by both parties and presented the court’s rationale for its ruling on Nielsen’s motion to compel Hyphametrics to produce the disputed documents. The court began by addressing Hyphametrics’ intentional production of certain reports to Nielsen. Despite Hyphametrics’ claim that the documents were mistakenly believed to be unprotected by the work product doctrine, the court noted that the intentional release of these documents nullified any work product protection. The court emphasized that the mistaken belief in their protection status cannot serve as a valid basis for claiming inadvertent production.

The court explained that Defendant’s prior counsel (“prior counsel”) produced three reports at issue here to Plaintiff. “When prior counsel did so, it knew all of the facts one would need to know to understand that, under the law, those documents were protected by the work product doctrine. A document is protected by the work product doctrine if it is prepared in anticipation of litigation or trial by a party or its representative. Fed. R. Civ. P. 26(b)(3)(A). It is undisputed here that the reports fit this bill, and prior counsel knew this when they intentionally produced the reports.” As a result, the court concluded that Defendant therefore waived any work product protection for the reports by intentionally producing them here. Continue reading

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The legal battle between GoTV Streaming, LLC and Netflix, Inc. continues to unfold, captivating the streaming industry and legal observers alike. In a recent development in the case, the district court issued an order denying Netflix’s motion to compel GoTV Streaming to disclose its third-party funding related documents. This ruling adds a new layer of complexity to the proceedings and sheds light on the district court’s perspective regarding the use of third-party funding in high-stakes litigation.

Netflix sought to compel GoTV Streaming to disclose its third-party funding documents, arguing that the information was essential to understanding the financial dynamics behind the lawsuit. They contended that such funding arrangements might create conflicts of interest, influence litigation strategy, or affect the plaintiff’s ability to meet potential damages awards. Netflix believed that these documents were critical for a comprehensive assessment of the case and ensuring a fair trial.

In the order, the district court denied Netflix’s motion to compel GoTV Streaming to disclose its third-party funding documents. The district court acknowledged the potential relevance of the information requested by Netflix but found that Netflix did not meet the standard required for disclosure. The district court reasoned that the mere possibility of conflicts of interest or influence on litigation strategy was not sufficient grounds to compel disclosure without stronger evidence of impropriety. Continue reading

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In the case of Speyside Medical, LLC v. Medtronic CoreValve LLC et al, the district court recently granted the defendants’ motion to compel the plaintiff, Speyside Medical, to produce information regarding its members and litigation funder. The district court found such information relevant, emphasizing the importance of understanding the precise financial stake held by the plaintiff’s members in the outcome of the lawsuit.

Speyside Medical, LLC filed a lawsuit against Medtronic CoreValve LLC and other defendants. As the litigation unfolded, the defendants sought to compel Speyside Medical to disclose information about its members and its litigation funder. They argued that this information was crucial to understanding potential biases that may arise from financial interests in the case outcome.

In granting the defendants’ motion to compel disclosure, the district court stated, “Surely whether Plaintiff’s members have a financial interest in the outcome of this lawsuit is, as Defendants suggest, relevant to bias for purposes of future cross-examination of the members.” The district court emphasized the significance of understanding the precise financial stake held by the plaintiff’s members, considering the complexity of the financial arrangements involved. Continue reading

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In this patent infringement action, defendant Carvana sought to exclude the plaintiff Estech’s expert report and opinions regarding a conjoint survey. Carvana moved to exclude the expert’s opinion asserting that the survey failed to satisfy the reliability requirements of Rule 702 and Daubert.

As explained by the district court, Estech hired its expert, Dr. R. Sukumar, to “perform a conjoint analysis—a consumer research survey method—used to “determine customers’ willingness to pay for features represented in this patent infringement lawsuit.” In his report, Dr. Sukumar explained that conjoint analysis provides a way to determine how much consumers value a particular feature of a multi-feature product. Dr. Sukumar then used a conjoint analysis in an effort to quantify a difference in market value for a voice over IP (VoIP) solution/service based on seven attributes: five attributes corresponding to patented features, one distractor attribute, and one price attribute. Using information obtained from the survey, Dr. Sukumar calculated numerical values representing consumer willingness to pay for each of the five attributes corresponding to the patented features.

In its motion, Carvana argued that the conjoint survey was unreliable because the features it ascribed to the patents were not directly tied to the patented technology, relying on Fractus, S.A. v. Samsung. 6:09-CV-203-LED-JDL, 2011 WL 7563820, at *1 (E.D. Tex. Apr. 29, 2011) (Granting motion to exclude customer surveys attributing a certain dollar value and identifying importance of percentage of cell phones with internal as opposed to external antennas because “the surveys do not measure how consumers value the purported advantages provided by Plaintiff’s technology.”). Continue reading

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In this patent infringement action, Apple moved to exclude Masimo’s damage theory on lost profits for failure to disclose during discovery. As explained by the district court, Masimo presented its lost profits theory based on the equation: “Lost profits = Apple Watch units sold x Masimo’s per-unit profit.” Masimo claimed that the equation breaks down and is supported as follows:

  • Apple Watch units sold from Q4 2018 to Q1 2023 (i.e., from the first sale of an Apple Watch to present), including Series 4-7
  • Masimo’s sensor module price of $100
  • Masimo’s gross profit margin (overall as a company) of 65% (or, alternatively, subtracting the cost to build each sensor module from the $100 price)

The district court analyzed whether each of these “building blocks” were adequately disclosed by Masimo.

With respect to the first building block, sold units of Apple Watches, the district court determined “that Plaintiffs did not disclose during fact or expert discovery (1) the subset of Apple Watch models and sales units on which they now intend to rely at trial; or (2) an explanation of why this subset of units properly informs lost profits.” Masimo’s reliance on Apple’s disclosure of total watches sold was insufficient because Massimo was not contending that all watches were part of the lost profits theory. Continue reading

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In this ongoing patent infringement action, the District Court continued to issue rulings on the Daubert motions filed by the defendant, Labcorp.  Ravgen’s technical expert, Brian Van Ness, offered two opinions: (1) the asserted claims, which are all method claims, are infringed by offering to sell and/or sale; and (2) there are induced infringement and willful infringement with the requisite intent.  Labcorp moved to exclude both opinions as contrary to the law.

With respect to the first opinion, whether method claims can be infringed by a sale or an offer for sale, the district court explained that Chapter 35 of the United States Code, Section 271(a) provides: “Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term therefor, infringes the patent.”  The district court also explained that the Federal Circuit stopped “an inch away from deciding the broader question of whether a method claim may be infringed under the ‘sells’ and ‘offer to sell’ prongs of § 271(a).” Isis Pharms., Inc. v. Santaris Pharma A/S Corp., No. 3:11-CV-2214-GPC-KSC, 2014 WL 2531973, at *3 (S.D. Cal. June 4, 2014) (interpreting NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1320–21 (Fed.Cir.2005)).

After noting the above and that this unanswered question has caused a split of authority, the district court joined “the group of courts that have ruled that a patent holder may not base its infringement claims on the sale or offer for sale of a patented method. To be infringed, a method must be performed.” Continue reading

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In this patent infringement action, Ravgen asserted that Labcorp infringes claims of its 727,720 and 7,332,277 patents (the “’720” and “’277” patents through four cell-free DNA-based tests, each of which are non­invasive prenatal tests (“NIPT”)) and Resolution ctDx Lung Assay (“ctDx”) (a liquid biopsy test for cancer). Labcorp moved to exclude certain opinions of Ravgen’s damages expert.

As explained by the district court, in support of its claims against Labcorp, Mr. Meyer, Ravgen’s damages expert, provided a reasonable royalty opinion based on a Georgia-Pacific hypothetical negotiation analysis. In that analysis, Mr. Meyer relied on several agreements to inform the appropriate royalty, including five Ravgen Agreements that granted licenses to the asserted patents, which each cover NIPT and/or liquid biopsy tests. He also relied on three Sequenom Agreements (the “Sequenom-Quest,” “Sequenom-Mayo,” and “Sequenom-ISIS” Agreements) involving technology comparable to the asserted patents. Based on these Agreements and the apportionment built into the royalties contained in those agreements, Mr. Meyer determined a per-unit royalty for the hypothetical license to Labcorp.

In its motion, Labcorp asserted that the following opinions of Mr. Meyer should be excluded: (1) his calculation of reasonable royalty (up to $290 million) for failure to undertake the legal requirement of apportionment; and (2) his use of and any reference to the Ravgen Agreements in forming his opinions, because they lack sufficient comparability to the hypothetical license. Labcorp asserted that Mr. Meyer effectively invokes the entire market value rule (“EMVR”), as he calculated his reasonable royalty using the revenues attributable to the entire market value of the accused tests and he did so by using the ASP (average sales price) as the royalty base for the accused tests. Continue reading