Steady As She Goes – Court Adopts Jury’s Royalty Rate for Ongoing Royalties

Following a jury verdict awarding damages for past infringement, the court and the parties have to work out what the appropriate form of relief for any future infringement will be, taking into account the availability of an injunction and the appropriate rate for any royalties applied to ongoing activity.  In a recent opinion an EDTX judge addressed the situation where no injunction was sought, no enhanced damages issue was presented, and the sole issue was what royalty rate should be applied to future activity.

Verdict in Marshall patent case

A Marshall jury in Judge Rodney Gilstrap’s court rendered a verdict Friday afternoon in a patent trial involving side scan sonar technology.  (Whether it involved this image of the German aircraft carrier Graf Zeppelin at the bottom of the Baltic Sea I can’t say, but as the plaintiff is a Norwegian company, I like to hope that it did, because as side scan sonar images go, it’s pretty cool). The verdict is interesting because the damages award includes components for a running royalty (as opposed to a lump sum) and lost profits as discussed below.

Use of Confidential Video Clip Not “Fair Use”

Interesting case this week in which Judge Gilstrap granted the plaintiff’s motion for summary judgment of a “fair use” defense in a copyright infringement case in which the defendant alleged various causes of action arising out of an employment termination, and attempted to use a purloined video clip as evidence.  The facts look like something off Dr. Phil.  In fact, they actually were.

Motion to Dismiss Alleging Improper Venue Denied; Motion to Transfer Granted

The issue of whether venue is proper in a patent case post-TC Heartland turns most often on the court’s analysis of whether the defendant has a “regular and established place of business” in the district.  A recent opinion by Judge Gilstrap, applied his four-factor test set forth in Raytheon v. Cray before considering the defendant’s alternative motion to transfer based on convenience.

But the Court’s analysis in this case underscores something I say a lot, which is that it’s shortsighted to view venue statutes in isolation.  The venue statutes enacted by Congress set for a coherent multistep scheme for determining where a case will be tried. The first step involves an initial Congressional decision as to which federal districts a case may be brought in.  The second – what I refer to frequently as a “safety valve” – involves a judicial determination whether a case that is brought in an district of proper venue should nonetheless be transferred to another district for convenience reasons.   Given that motions to transfer are granted at a very nearly exactly 50% rate in EDTX over the last three years, the interaction between these two inquiries bears more attention than it gets – because just because a case is filed here doesn’t mean it will be heard here.

Cases Stayed, 101 Motions Granted

Earlier today I posted about the situation in which a plaintiff files a patent suit, motions to dismiss (often arguing lack of patentable subject matter under Section 101) are filed, and the cases are dismissed before the motions are resolved. This litigation provides an example of this that later nonetheless resulted in a dismissal on the merits of 101 motions, but also illustrates several other things, including filing trends from 2015-to pre-TCH 2017 as bulk filer cases dropped off, as well as changes in case management locally – against as the bulk filings dropped from 2015 levels.

Dismissals With / Without Prejudice

An interesting trend of late in cases filed in EDTX is that a substantial number are ending with dismissals “without” prejudice as opposed to settlements that result in dismissals with prejudice.  I wanted to mention a couple of things I am seeing both statistically and anecdotally, and mention a recent decision that addresses an aspect of this trend, as well as alert readers to some possible upcoming decisions in this area.

More CAFC Activity on EDTX Defense Trial Wins and Injunction Denials

Yesterday was EDTX day at the CAFC again, with that court ruling on appeals from three of last year’s nine Marshall patent trials.  It affirmed three noninfringement defense wins in two related cases, but reversed Judge Gilstrap’s denial of the sole prevailing plaintiff’s application for an injunction in an appeal arising out of the January 2016 trial that broke the 2015-2016 EDTX defense win streak at six verdicts.

The opinions are attached with a brief explanation of each.

Tyler jury verdict

A Tyler jury in Judge Rodney Gilstrap’s court rendered a verdict in a patent case Friday afternoon, finding that the defendant directly infringed, and further finding willful infringement, and rejecting the invalidity defenses of lack of written description or enablement.  The jury awarded the plaintiff $4.1 million. Just how big of a win this actually was might be made clearer by the post on Judge Love’s opinion excluding a damages expert’s supplementation on the issue of indirect infringement – because I don’t see that indirect infringement was even submitted in the attached verdict.

EDTX Court Establishes Factors for Evaluating Patent Venue Post-TC Heartland

On May 26, four days after the U.S. Supreme Court issued TC Heartland, Judge Rodney Gilstrap issued an order in a number of cases sua sponte calling for supplemental briefing as to the effect of TCH on motions that were either recently denied or still pending in which the defendants asserted the Fourco improper venue defense.  That briefing would conclude on or about June 15.

Although not included with those cases, the defendant in Raytheon v. Cray had asserted Fourco in a motion which was subsequently denied based on VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) in 2016, and on June 1, 2017, it reurged the improper venue defense approximately three months before trial.  The Court set a briefing schedule concluding on June 22, and seven days later Judge Gilstrap issued a 27 page opinion that denied the motion.

Although a footnote on the last page of the opinion states that the opinion rests on the Federal Circuit’s holding regarding the “regular and established place of business” in In re Cordis Corp., 769 F.2d 733 (Fed. Cir. 1985), which was its last opinion on the subject before it essentially mooted the language in VE Holdings, the opinion contains an extensive analysis of the issues surrounding this language as a result of the numerous contested motions to dismiss or transfer, and provides guidance and a set of factors to be applied in future cases.

This isn’t unprecedented for common issues – Judge Gilstrap did the same for Section 285 motions earlier this year in Iris Connex, as did Judge Heartfield for motions to transfer a few years back in Mohamed v. Mazda (referred to by some down Beaumont way as the “Magna Carta” of venue jurisprudence for a number of years as it contained state of the art research on every venue issue district courts commonly saw), and Judge Hall on the same subject a few years earlier in 1992 in Box v. Ameritrust – analysis that he revisited in the first Marshall patent case Texas Instruments v. Micron the next year, incidentally).

I wanted to go through the opinion noting the issues it does (and does not) decide, since as the Court notes, they are being raised in numerous cases.