Rapid Resolution of Five-Patent Case in California Using an Offer of Judgment

The Situation

Plaintiff CareView Communications, Inc. has been in the business of designing, manufacturing, and selling patient monitoring systems to health care facilities and owns 30+ patents on various related technologies. Public records indicate, however, that CareView has been struggling financially. Defendants Interactive Digital Solutions, LLC and MedSitter, LLC (collectively, IDS) more recently entered the same market with their own virtual patient observation system called MedSitter, recently backed by a substantial investment from Berenson Capital. In response to this investment and IDS further penetrating the market, CareView filed suit alleging infringement of five patents in the Western District of Texas.

The Approach

The defense strategy was to seek rapid resolution – to dispose of the case within a year. At step one, Mintz removed the litigation from the Western District of Texas to a forum more favorable for this strategy, namely the Northern District of California, in less than three months. Once in NDCA, Mintz swiftly moved to dismiss all grounds in the complaint under the Alice framework and further challenged the plaintiff’s infringement allegations under Federal Rule of Civil Procedure 11. The rule allows courts to sanction attorneys for submitting pleadings for an improper purpose or making arguments that lack factual support. The team also identified claims of inequitable conduct and unfair competition and threatened the same in letter campaigns against the plaintiff.

While discovery had not yet officially commenced, Mintz produced all necessary technical documents and demanded that the plaintiff inspect the accused product and its source code, which forced the plaintiff to concede non-infringement as to two patents. In conjunction with these pressure points, Mintz served an offer of judgment under Federal Rule of Civil Procedure 68.

The Outcome

The plaintiff accepted the defendants’ offer of judgment under Federal Rule of Civil Procedure 68. At the time, the defendants’ Alice motion, Rule 11 allegations, and charges of inequitable conduct and unfair competition were looming, as well as the plaintiff’s concession of non-infringement as to two patents and the imminent expenses of claim construction and defending IPR petitions.