Minnesota Patent Litigation Wrap-Up: Q1 2022

Co-Authored by: Ryan Petty, Ph.D.

This post continues our summary of substantive orders in patent litigation in the District of Minnesota. This summary includes discovery relevant to willfulness findings, stays under the customer suit exception, and preliminary injunctions.

Schwab-Vollhaber-Lubratt, Inc. v. Carson Design & Mfg., Inc., Case No. 21-cv-619 (WMW/DTS), 2022 WL 610967 (D. Minn. Feb 2, 2022)

Plaintiff Schwab-Vollhaber-Lubratt ("SVL") sued Defendants Carson Design and Manufacturing and Midwest Mechanical Supply alleging infringement of certain SVL patents. 2022 WL 610967, at *1. At issue was a discovery dispute where SVL moved to compel production of documents relating to Defendants' first awareness of the patents-in-suit. Id.

Defendants argued that there was no relevance to their "first awareness" of the patents-in-suit because SVL failed to mark its patents, and therefore damages only accrued on actual notice of infringement. Id. at *2 (citing 35 U.S.C. § 287(a)). SVL responded that its request was relevant because SVL alleged willful infringement, which may lead to enhanced damages. Id. (citing 35 U.S.C. § 284). Magistrate Judge Schultz agreed with SVL, finding that discovery could lead to numerous facts that could aid in a willfulness finding, including "whether Defendants deliberately copied the ideas or design of SVL," "whether Defendants, when they knew of SVL's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed," whether Defendants took any "remedial action" and "whether Defendants attempted to conceal their misconduct." Id. He thus granted SVL's motion to compel documents concerning Defendants' first awareness of the patents-in-suit. Id. at *3.

Nitride Semiconductors Co. Ltd. v. Digi-Key Corp., Civil No. 21-437 (JRT/LIB), 2022 WL 816551 (D. Minn. Mar. 17, 2022)

Plaintiff Nitride Semiconductors ("Nitride") sued Defendant Digi-Key for selling certain products manufactured by multiple electronics companies that allegedly infringed U.S. Patent No. 6,861,270, directed to a method of manufacturing semiconductors and LEDs. 2022 WL 816551, *1. One of the manufacturers, Crystal IS, brought a declaratory judgment action against Nitride in the Northern District of New York, Crystal IS's home district. Id. Digi-Key, who simply resells Crystal-IS's product and is otherwise unrelated, moved to dismiss or stay Nitride's suit. Id.

Chief Judge Tunheim began his analysis by noting courts generally give priority to the first action filed. Id. A specific exception relevant to patent litigation, however, is the "customer suit" exception. Under the customer suit exception, "when a first-filed lawsuit is directed toward a customer, rather than a manufacturer, a second suit involving the manufacturer and the patent holder may take priority over the first." Id. (citing P.S.I. Nordic Track, Inc. v. Great Tan, Inc., 686 F.Supp. 739, 739-41 (D. Minn. 1987); Emerson Elec. Co. b. Black & Decker Mfg. Co., 606 F.2d 234, 240-41 (8th Cir. 1979)). This creates "a rebuttable presumption favoring a manufacture's suit brought in its home jurisdiction over a customer suit in a jurisdiction in which the manufacturer cannot be sued." Id.

Chief Judge Tunheim noted that the Eighth Circuit considers seven factors when evaluating the customer suit exception, but Nitride only addressed the first factor: whether the manufacturer is the primary party. Id. at *2. On this factor, Nitride argued that Digi-Key "is a nationwide retailer that has demonstrated that it will not be deterred by judgments against its suppliers." Id. Chief Judge Tunheim did not find this argument persuasive, especially in light of Nitride's failure to address the other six factors. Id. He did note, however, that courts generally prefer to stay a case than dismiss it under the customer suit exception. Id. In light of the fact that resolution of the NDNY suit could resolve issues in the present case, Chief Judge Tunheim elected to stay the case instead of dismiss it with the possibility of requiring Nitride to refile in the future. Id.

Vascular Solutions LLC v. Medtronic, Inc., Case No. 19-CV-1760 (PJS/TNL), 2022 WL 832102 (D. Minn. Mar. 21, 2022)

Co-plaintiff Teleflex moved for a preliminary injunction[1] after a final written decision from the Patent Trial and Appeals Board concluded that Plaintiffs' patents directed to guide-extension catheters used in cardiology procedures were not invalid. 2022 WL 832102, at *1. Judge Schiltz focused on the first factor for a preliminary injunction, likelihood of success on the merits. Id. at *2.

Medtronic argued that it did not infringe because the side opening of its catheter overlapped with, but was not part of, the "substantially rigid portion" of the catheter, as required by the claims. Judge Schiltz found that Medtronic's argument "turns on an issue of claim construction" for the term "substantially rigid portion." Id. at *3. According to Medtronic, the "substantially rigid portion" was the "the portion of the device that does the pushing rather than the portions of the device (such as the flexible-tip portion) that get pushed." Id. Judge Schiltz concluded that under Medtronic's claim construction, its catheters would be non-infringing. Id. He further noted that co-plaintiff Teleflex presented no infringement arguments in its opening brief, and instead cited to its claim charts, which Judge Schiltz found was "a transparently improper circumvention of this District's briefing limits." Id. n.9. Judge Schiltz also found that Medtronic's construction was "simpler" for a person of ordinary skill in the art to apply and consistent with Teleflex's own representation of the claim language in similar cases. Id. at *3-4. He rejected Teleflex's arguments concerning its proposed claim construction, describing them as "artificial and manipulative," and concluded that Medtronic had raised a substantial question of non-infringement. Id. at *4-6. Accordingly, Teleflex had failed to show likelihood of success on the merits, and Judge Schiltz therefore did not need to address the remaining preliminary injunction factors. Id. at *6 (citing Steel Car, Ltd. v. Canadian Pac. Ry., 357 F.3d 1319, 1325 (Fed. Cir. 2004)). He thus denied Teleflex's motion for a preliminary injunction. Id.

[1] The authors previously reviewed Teleflex's first motion for a preliminary injunction here.