Minnesota Patent Litigation Wrap-Up: May 2017

Authored by: Conrad Gosen

This post continues our monthly summary of patent litigation in the District of Minnesota, including short summaries of substantive orders issued in pending cases.

In May, 2017, there were four notable substantive decisions or orders for pending cases.

Rotochopper, Inc. v. Bandit Indus., Inc., No. 16-cv-3368 (March 7, 2017) (Frank)

• Motion to dismiss: Granted

Plaintiff Rotochopper brought suit against Bandit industries, alleging that Bandit's industrial wood chipper, called "The Beast," infringed upon Rotochopper's patent rights. Bandit moved to dismiss for lack of personal jurisdiction, contending that no models of "The Beast" in an infringing configuration had been sold or distributed in Minnesota. Bandit further argued that it did not maintain any offices or permanent employees in Minnesota — only a distributor for other, un-accused products. In response, Rotochopper contended that jurisdiction existed under a "stream of commerce" theory because "it is possible that an infringing product will be sold to a customer in Minnesota."

The Court rejected Rotochopper's argument, holding that to invoke a "stream of commerce" theory of personal jurisdiction, "Plaintiff must demonstrate that Defendant's sales of the allegedly infringing products was not an isolated occurrence, but instead that any sales arose from Defendant's efforts to deliver the allegedly infringing products into the stream of commerce in Minnesota with the expectation that it would be purchased in the state." The Court also rejected Rotochopper's general jurisdiction arguments and granted Bandit's motion to dismiss.

Arctic Cat Inc. v. Polaris Indus. Inc., No. 16-cv-0009 (May 15, 2017) (Bowbeer)

• Order to disclose billing records

In a prior motion, Magistrate Bowbeer awarded Polaris its fees in connection with bringing a motion to strike. In seeking its fee award, Polaris provided Arctic Cat a spreadsheet listing only the time spent per attorney and resulting fees, but did not provide any description of the work performed by such attorneys. Arctic Cat objected, alleging that it could not properly analyze the reasonableness of Polaris's request for fees without at least some description of what work was performed by Polaris's attorneys. Polaris contended that the description of work performed was confidential attorney work product.

Magistrate Bowbeer agreed with Arctic Cat and ordered that Polaris provide Arctic Cat with billing records that included descriptions of the work performed. The Court reasoned that "[w]hile billing records that reveal the motive of the client in seeking representation, litigation strategy, or the specific nature of the services performed, such as researching particular areas of the law, fall within the privilege, billing records that do not reveal communications between counsel and clients, are usually not privileged." The Court's order allowed Polaris to continue withholding material "to which a good faith claim of privilege or work product protection can be made," but also noted that "it is difficult to see how . . . entries describing work product that eventually appeared in [briefing] could fairly be characterized as privileged or work product."

Regents of the Univ. of Minn. v. Sprint Solutions, Inc., No. 14-cv-4669 (May 19, 2017) (Leung)

• Motion to compel: Granted
• Motion to stay pending IPR: Granted

Judge Leung's combined order granted the University of Minnesota's motion to compel additional discovery from Sprint, and also granted Defendant-Intervenor Ericsson's motion to stay pending a decision by the USPTO on Ericsson's petitions for IPR of the University's asserted patents.

In its motion to compel, the University contended that, although its infringement contentions broadly accused Sprint's LTE networks of infringement, Sprint had only provided discovery into the portions of its LTE networks provided by a certain subset of manufacturers. The University contended that Sprint withheld discovery regarding the portions of its LTE networks provided by other manufacturers. Sprint contended that the University's infringement contentions did not specifically identify any products from these additional manufacturers, and thus the University's discovery requests should be limited to only a subset of products. Magistrate Leung rejected Sprint's argument, finding that the University's infringement contentions broadly accused Sprint's LTE network of infringement and were not limited to a particular manufacturer's equipment.

In granting Ericsson's co-pending motion to stay in view of Ericsson's IPR filings, Magistrate Leung concluded that the stay would not unduly delay the case and would not prejudice the University. Magistrate Leung noted that, because the University is a non-practicing entity (i.e., one that does not manufacture or operate LTE networks), a stay would not place any interests of the University, such as sales or market share, at risk. The Court also noted that, absent a stay, there existed a risk of inconsistent results between the two forums in construing the claims of the University's patents. The Court concluded there will be a "substantial overlap" in the issues raised in the IPR proceedings and that "[e]ven the chance for simplification in these hyper complex cases warrants the measure of instituting a stay before IPR has instituted."

QFO Labs, Inc. v. Parrot, Inc., No. 16-cv-3443 (May 26, 2017) (Bowbeer)

• Motion to dismiss: R&R for granting

QFO, a Bloomington, Minnesota company, brought suit against Parrot alleging that Parrot's drone products infringed certain of QFO's patents. However, two months before QFO filed suit, Parrot filed its own declaratory judgment action in Delaware, seeking a declaration that QFO's patents are invalid and that Parrot does not infringe. Parrot also filed IPRs against the asserted QFO patents. Once QFO filed suit in the District of Minnesota, Parrot sought to dismiss or transfer the Minnesota case on the grounds that the declaratory judgment action in Delaware was the "first-filed" and thus takes precedence over the Minnesota case.

QFO contended that the "first-filed" rule should not apply, arguing that Parrot's Delaware filing was an "anticipatory" action filed immediately before QFO's own. The Court rejected this, noting that Parrot filed its case more than two months in advance of QFOs and nothing in the record indicated that QFO was prepared to file its own suit or was intending to do so until after Parrot filed its declaratory judgment action. The Court found that the remaining factors weighed in favor of dismissal or were neutral, and thus recommended that Parrot's motion be granted.