Patent Litigation

Read about Tesla’s ongoing patent litigation battles with Autonomous Devices and CAP-XX Ltd. and patent infringement cases filed against Tesla in New York and Texas.

Read about patent litigation involving Tesla and electric vehicle technology, the DOE’s new critical mineral assessment, EV and powertrain manufacturer Proterra’s decision to file for bankruptcy, and battery maker Freyr Battery.

Advice that may have served House of Pain in their 1992 hit song, “Jump Around,” to “bring a shotgun” to battle likely does not translate well to plaintiffs in federal litigation contemplating bringing a “shotgun” pleading to court. In this article we explore types of shotgun pleadings identified by courts and outline potential responses to a shotgun pleading.

A frequent issue seen within patent litigation is whether serving a complaint satisfies the knowledge requirement for post-complaint indirect infringement. This issue affects the amount of, if any, damages a patent owner can obtain.

On February 24, 2023, the U.S. Court of Appeals for the Federal Circuit, in Jazz Pharmaceuticals, Inc., v. Avadel CNS Pharmaceuticals, LLC, Case No. 23-1186, affirmed a decision from the District Court of Delaware directing Jazz Pharmaceuticals, Inc. (“Jazz”) to delist U.S. Patent No. 8,731,963 (the “’963 patent”) from the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations publication (the “Orange Book”). The district court held, and the Federal Circuit affirmed, that the ’963 patent, which covers Risk Evaluation and Mitigation Strategies (“REMS”) for the narcolepsy drug Xyrem®, failed to claim a drug or method of use, and was thus improperly listed.

Innovators developing IP strategies for 2023 are reflecting on last year’s key IP issues, including entity size designations for US patent applications, erasures of patent damage awards due to flawed expert opinions, and developments involving the ITC, artificial intelligence and machine learning, and inter partes reviews.

On December 19, 2022, U.S. Magistrate Judge Robert W. Lehrburger of the Southern District of New York recommended denying a motion to dismiss claims of willful infringement of eight patents asserted in a Second Amended Complaint (“SAC”). The recommendation finds (1) that pleading willful infringement does not require allegations of egregious infringing conduct and (2) that requisite knowledge of the asserted patents and alleged infringement could be satisfied by the filing of the Original Complaint along with plaintiff’s email (“pre-SAC email”) informing the defendants of additional alleged infringement of two patents prior to filing the SAC.

Grants of permanent injunctions in U.S. district court patent litigation remain uncommon since the landmark decision in eBay v. MercExchange. LexMachina’s 2021 Patent Litigation Report highlights that courts grant fewer than fifteen permanent injunctions annually in the U.S. One such injunction was recently granted in Siemens Gamesa Renewable Energy A/S, v. General Electric Co. (“Siemens”) by the District of Massachusetts. That case is notable not only because it granted an injunction, but also because it took a novel approach to balancing public interest in doing so. Specifically, the public interest considerations implicated public green energy projects. In view of the Inflation Reduction Act (“IRA”), which was signed into law and provides incentives to combat climate change by investing in technologies such as solar and wind energy, such public interest considerations may become more common.

Patent owners can recover lost profits when (1) there is a demand for a patented product, (2) an absence of acceptable non-infringing alternatives, (3) the patentee had the manufacturing and marketing capacity to exploit demand for the product, and (4) the patentee can establish the amount of profit it should have made but-for the accused product. Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1285 (Fed. Cir. 2017) (reciting the Panduit factors). An implicit threshold requirement of this legal framework is actually being the entity that earns profits on the patented product.

On July 12, 2022, U.S. District Judge Alan D. Albright of the Western District of Texas denied alleged infringer Lenovo’s motion to dismiss ACQIS’s willful and indirect infringement and enhanced damages claims, holding that patent owners need not allege egregious infringing behavior to assert a claim of willful infringement.

The power of Rule 11 – as with any weapon – must be employed diligently and with good judgment, as recently reiterated by the Northern District of Ohio.

The United States Supreme Court denied certiorari in the closely observed case American Axle & Manufacturing, Inc., v. Neapco Holdings LLC. The Court’s refusal to hear the case disappointed patent practitioners nationwide—and likely also members of the Federal Circuit Court of Appeals, which itself has been clamoring for guidance.

While litigants may oft use Rule 11 prematurely or inappropriately, it does have its proper time and place when deployed as intended. In the patent context, examples include when claim elements are clearly missing in an accused product but a patent owner refuses to withdraw infringement allegations or, conversely, when a defendant continues to contest infringement when all claim limitations are clearly present in the accused product. Rule 11 grounds also arise in different contexts, as in the recent case of Imprenta Services, Inc.v. Karll.

Avanci’s pool retains its 5th Circuit win, in a slightly different way, after an unusual turn of events where the panel rescinded its prior opinion and issued a new one. The new opinion  affirms the district court’s ruling that Continental failed to state a claim under the Sherman Act (antitrust laws) thereby dismissing the case.  The original opinion found that Continental lacked standing to pursue its claims because it was not a third party beneficiary of the standard setting organization contract. Although the new ruling leaves some questions unanswered in the long-running dispute between a would-be implementer (Continental) and holders of standard essential patents (SEPs), the opinion rejects applying the antitrust laws in the SEP/FRAND context.

On June 8, 2022, the DOJ, USPTO, and the National Institute of Standards and Technology (NIST) (collectively, the Agencies) issued a new statement on FRAND licensing (2022 Statement) providing no set policy regarding Standards Essential Patents (SEPs), which should inure to the benefit of patent owners. By issuing this statement and declining to adopt their 2021 Draft Policy (2021 Draft Policy), the Agencies effectively neutralized their policy on SEP licensing and provide no guidance to parties in SEP licensing discussions. Even with no guidance, however, the Agencies are reserving the right to police negotiations and prosecute opportunistic behavior by either side in a case-by-case basis, creating a circumstance where negotiators may not know if they are raising the Agencies’ ire. Though knowledge of the evolving multinational case law related to SEP license negotiation provides reasonable understanding of the necessary procedure. 

Successful ITC trade secret complainants follow these rules before filing the complaint in Section 337 investigations:

To be a successful trade secret litigant at the ITC, it is critical to be mindful of unique substantive and procedural aspects of Section 337 litigation.  These differences offer both promise and peril for complainants.

Opponents of the use of Section 337 by Standard Essential Patent (SEP) holders claim that the threat of ITC exclusion orders lends itself to patent hold-up. These opponents, however, can point to no instance in which an ITC respondent has successfully made its case for “patent holdup” to the Commission. Section 337 investigations have many opportunities for respondents to actually prove that the Complainant is abusing the process by seeking royalties on something other than fair and reasonable terms. The absence of any such successful showing by a respondent speaks for itself.

On March 16, 2022, U.S. District Judge William Alsup of the Northern District of California certified two of the hot button issues splitting district courts on the standard for pleading willful infringement, holding that:

• The complaint itself is insufficient to provide the requisite knowledge of the asserted patents and alleged infringement; and
• Patent owners need not otherwise allege egregious infringing behavior as part of a willful infringement claim.

Recognizing the split among district courts on these issues, the court certified its decision for interlocutory appeal to the Court of Appeals for the Federal Circuit under 28 U.S.C. § 1292(b). Thus, the Federal Circuit may soon have an opportunity to resolve this long-standing split among districts, which, according to Judge Alsup, has consumed a “vast amount of resources” in litigation around the country.