Massachusetts Patent Litigation Wrap Up — April 2019

This post is a part of a monthly series summarizing notable activity in patent litigation in the District of Massachusetts, including short summaries of substantive orders.

Intellectual Ventures I, LLC v. Lenovo Group, Ltd., et al., 370 F. Supp. 3d 251 (D. Mass. 2019) (Saris, J.)

• Order on EMC's Motion for Summary Judgment on the Invalidity of Claim 11 of the '442 Patent – GRANTED

Intellectual Ventures I, LLC ("IV") brought suit against EMC Corp. ("EMC"), among others, alleging infringement of claim 11 of U.S. Patent No. 6,516,442 (the "'442 patent") covering a symmetric multiprocessor system or shared-memory multiprocessor system for computers. EMC moved for summary judgment of invalidity arguing in the alternative that (1) IV was collaterally estopped from disputing that claim 11 was invalid in view of an earlier PTAB decision finding claim 1 invalid and (2) there was no genuine material dispute of fact regarding whether claim was obvious as a matter of law. The Court granted EMC's motion on the first basis, finding that "claim 11 is invalid on the basis of collateral estoppel" and declined to address whether claim 11 is invalid as a matter of law.

Earlier in the litigation, EMC petitioned the PTAB to institute IPR proceedings for the '442 patent challenging the validity of the claims asserted by IV against EMC in litigation, which did not then include claim 11. The proceedings did include claim 1, from which claim 11 depends. The PTAB found all of the challenged claims, including claim 1, invalid as obvious. IV's motion for rehearing was denied and IV did not appeal to the Federal Circuit.

Claim 1 was directed to "[a] shared-memory multi-processor system" and focused on an interface to the microprocessors and a memory device. Claim 11 added limitations that recited the microprocessors and the memory device. In opposition to EMC's motion for summary judgment, IV asserted that there was a distinction between the "microprocessors" in claim 11 and the "processing units" in the prior art reference that had invalidated claim 1 in IPR. The Court found IV's argument unpersuasive because during the IPR proceedings IV did not dispute that the prior art involved multiple microprocessors and shared memory. Further, in the litigation before the district court, IV's expert failed to draw any distinction between "microprocessors" and "processor units" that would materially alter an obviousness analysis.

In analyzing the significance of the PTAB's prior invalidation of claim 1, the court noted that (a) PTAB decisions may have collateral estoppel effects on subsequent district court litigation and (b) collateral estoppel of invalidity may apply even where the patent claim in the earlier case was not identical, so long as the differences between the claims is not material to the question of validity.

Based on the PTAB's final written decision finding claim 1 unpatentable and the lack of a distinction between claim 1 and claim 11 that would "materially alter the invalidity analysis," the Court found that "claim 11 is invalid on the basis of collateral estoppel." Due to that finding, the Court declined to address invalidity as a matter of law.

Teva Pharm. Int'l GMBH v. Eli Lilly & Co., 18-cv-12029-ADB (D. Mass. Apr. 22, 2019) (Burroughs, J.)

• Order on Eli Lilly & Co.'s Motion to Transfer or Stay Pending Inter Partes Review –€“ GRANTED IN PART; DENIED IN PART

In 2017, Teva Pharmaceuticals International GmbH and TEVA Pharmaceuticals USA, Inc. (collectively "Teva") sued Eli Lilly and Co. ("Lilly") for patent infringement of nine patents covering migraine treatment drugs. Throughout 2018, Lilly filed IPR petitions for the nine patents-in-suit. After the PTAB instituted IPR proceedings on all of them, Lilly moved to transfer the case from the District of Massachusetts to the Southern District of Indiana or, if not transferred, to stay the litigation until completion of the IPR proceedings.

The Court first addressed the considerations to transfer.

Under 28 U.S.C. § 1404(a), a district court may, in the interest of convenience and judicial efficiency, transfer a case from a proper venue to another district where the case may have been brought. The Court stated that while it gave limited deference to Teva's choice of forum because Teva does not reside in its selected venue, Lilly failed to present any evidence to outweigh the presumption in favor of Teva's selected forum. Accordingly, the Court denied Lilly's transfer motion.

The Court next turned to each of the considerations for a stay pending completion of the IPRs, which it articulated as:

(i) The stage of the litigation, including whether discovery is complete and a trial date has been set;
(ii) Whether a stay will simplify the issues in question and the trial of the case;
(iii) Whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party.

As to the stage of litigation, the Court found this factor weighed in favor of a stay because Lilly filed the motion early and there was still no schedule for discovery; no Markman hearing had occurred; no summary judgment motions had been filed; and no trial date was set.

As to the simplification of the issues, the Court also found that this factor weighed in favor of a stay because all the patents-in-suit are subject to IPR proceedings. Any claims invalidated by the PTAB's decision will clarify the scope of remaining claims for trial. For any claims that do survive IPR, estoppel provisions will bind Lilly from rearguing issues that it raised or reasonably could have reasoned before the PTAB.

As to prejudice to the nonmoving party, the Court found this factor weighed slightly against a stay. Although there are other competitors in the migraine drug market, Teva and Lilly are direct competitors. Courts tend to disfavor stays involving direct competitors. Along with business relationship concerns, the Court considered whether a stay would cause Teva to lose any presently available legal remedies and found that it would not. Teva chose to seek only monetary damages and declaratory judgments. If Teva had moved for a preliminary injunction, the Court might have given more weight to this factor. The Court also noted that there was no evidence of dilatory motive on Lilly's part because Lilly timely filed all of its IPR petitions.

Taking all of the factors for a stay into consideration and viewing the totality of the circumstances, the Court granted Lilly's motion to stay pending completion of the IPRs.

Authors: Matthew Berntsen, Meaghan Annett