Minnesota Patent Litigation Wrap-Up — November 2017

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 November 2017, there were five notable decisions for pending cases.

Bombardier Recreational Prods., Inc. v. Arctic Cat Inc., No. 12-cv-2706 (Nov. 11, 2017) (Tunheim)

• Motions in limine: Granted-in-part

BRP brought suit against Arctic Cat alleging that Arctic Cat infringed on two of BRP's patents covering snowmobile technology. As a part of the lead up to trial, Judge Tunheim ruled on the parties' motions in limine, making the following notable holdings:

• Arctic Cat could not rely on prior art snowmobiles where it had failed to respond to an interrogatory relating to the chain of custody and manufacturing dates for those snowmobiles.
• While Arctic Cat could not rely on prior art not disclosed in its invalidity contentions, it could rely on such art as "background or generalized information."
• The Court denied BRP's request to bifurcate trial on Arctic Cat's equitable defenses of laches, estoppel, waiver and unclean hands.
• The parties could disclose that they had been involved in other litigation, but not discuss the status or outcome of those proceedings.
• The Court denied Arctic Cat's request to bifurcate the liability and damages phases of trial.

Bombardier Recreational Prods., Inc. v. Arctic Cat Inc., No. 12-cv-2706 (Nov. 20, 2017) (Tunheim)

• Motion for summary judgment: Granted

As a part of pre-trial procedure, the Court ordered Arctic Cat to submit a proffer of evidence demonstrating that Arctic Cat would "present at trial sufficient evidence to support a finding that one or more claims of the patents-in-suit are unenforceable due to equitable estoppel, laches, waiver, or unclean hands." After reviewing the evidence, the Court determined that Arctic Cat had not marshaled sufficient evidence to support its claims and granted BRP's motion for summary judgment on these defenses.

As to equitable estoppel, although BRP waited four years to bring suit against Arctic Cat, the Court held that Arctic Cat failed to identify any "misleading conduct" on the part of Arctic Cat, noting that silence is only misleading "where there is an obligation to speak." As to laches, Judge Tunheim noted the Supreme Court's rejection of the defense in SCA Hygiene. Finally, as to unclean hands, Judge Tunheim rejected Arctic Cat's allegations that BRP sought to patent the prior art and obtain patent coverage to which it was not entitled, noting that such actions, even if true, did not amount to the "extreme circumstances" necessary to support an unclean hands defense.

Solutran, Inc. v. U.S. Bancorp., No. 13-cv-2637 (Nov. 27, 2017) (Nelson)

• Motion for summary judgment of invalidity under 35 USC 101: Denied

Solutran brought suit against US Bank alleging infringement of Solutran's patent to a check processing system. Solutran's patent claims a method for processing paper checks that purported to increase the speed at which merchants were credited after receiving a check. Specifically, Solutran's claims recite receiving an electronic data file from a scanned check, crediting the merchant, and then later receiving the paper check itself and comparing the data file to a scan of the paper check. US Bank moved for summary judgment of invalidity under section 101, alleging that Solutran's claims recited an abstract concept. Judge Nelson denied US Bank's motion.

As to the first Alice step, US Bank alleged that the claims recited nothing more than the abstract concept of converting a check to electronic form and crediting a merchant before imaging the check. Judge Nelson disagreed, finding this characterization "fails to consider the character of the claims as a whole." Judge Nelson agreed that US Bank's characterization failed to credit the non-abstract steps of physically processing the checks from one location to another and in a particular sequence. As such, Judge Nelson found the claims not directed to an abstract concept, but to an "enhanced processing method and palpable application of that process." Moreover, Judge Nelson concluded that even if Solutran's claims recited an abstract idea under Alice's first step, then US Bank's invalidity challenge would still fail Alice's second step, because Solutran's patent recited a "sufficiently transformative inventive concept so as to be patent eligible."

Spineology, Inc. v. Wright Medical Tech., Inc., No. 15-cv-180 (Nov. 17, 2017) (Ericksen)

• Motion for fees under 35 USC 285: Denied

Spineology alleged that Wright Medical infringed its medical device patent, but the Court declared each asserted claim either invalid or not infringed. Wright Medical subsequently moved for attorney fees, alleging that the case was exceptional. Specifically, Wright Medical claimed that Spineology's infringement position was based on a construction of the term "body" that was inconsistent with the claims and written description of the asserted patent, and that Spineology pursued an insupportable damages theory.

Judge Ericksen rejected Wright Medical's allegations, explaining that "[a]lthough Spineology's infringement claims depended on a construction of 'body' that was inconsistent with the claims and written description, their assertion was not so meritless as to render this case exceptional." The Court made a similar finding as to Spineology's damages theory and evidence.

Danfoss Power Solutions Inc. v. Deltatech Controls., No. 16-cv-3111 (Nov. 2, 2017) (Schultz, M.J.)

• Motion to stay pending IPR: Granted

Deltatech sought to stay proceedings in the District of Minnesota pending an institution decision from the USPTO on its recently filed IPR petition challenging Danfoss's asserted patent. Danfoss opposed the stay motion, contending that it was premature given that the USPTO had not yet decided whether to institute review.

Judge Schultz held that, while the USPTO had not instituted review, he was persuaded that it would likely do so, given the strength of the prior art asserted in Deltatech's petition. Further, Judge Schultz found that while the delay of a stay would prejudice Danfoss, there was no evidence that such prejudice would result in undue prejudice, and the other factors (simplification of the case and the stage of the case) also favored granting the stay.